The European Commission has invited public comments on the commitments offered by tech giant Apple to resolve competition concerns related to access restrictions to Near-Field Communication (NFC) technology for contactless payments with mobile devices.
The Commission’s investigation revealed that Apple, through its mobile wallet solution Apple Pay, holds significant market power in the smart mobile device market and dominates the mobile wallet sector on its iOS operating system. The closed ecosystem of Apple’s iOS allows the company to control every aspect, including restricting access to the NFC hardware and software needed for mobile payments in physical stores.
In a preliminary finding on May 2, 2022, the Commission informed Apple that its exclusionary conduct could be in violation of Article 102 of the Treaty on the Functioning of the European Union (TFEU), as it may impede competition in the mobile wallet market on iOS devices.
Read more: EU Regulators Probe Deeper Into Apple Pay
To address these concerns, Apple has offered a set of commitments, which are now open for public input. These commitments include:
- Third-Party Access: Apple commits to allowing third-party mobile wallet and payment service providers access to the NFC functionality on iOS devices through a set of free Application Programming Interfaces (APIs). This access would be granted without the requirement to use Apple Pay or Apple Wallet.
- Equivalent Access: The APIs provided by Apple would offer equivalent access to NFC components in Host Card Emulation (HCE) mode, enabling secure storage of payment credentials and transactions through NFC without relying on an in-device secure element.
- Geographical Application: The commitments would apply to all third-party mobile wallet app developers in the European Economic Area (EEA) and all iOS users with an Apple ID registered in the EEA. The use of these apps for payments outside the EEA will not be restricted.
- Additional Features: Apple pledges to provide additional features and functionalities, including defaulting of preferred payment apps, access to authentication features like FaceID, and a suppression mechanism.
- Non-Discriminatory Criteria: Apple commits to applying fair, objective, transparent, and non-discriminatory eligibility criteria for granting NFC access to third-party mobile wallet app developers. Developers must conclude an ADP license agreement to obtain access.
- Dispute Settlement Mechanism: Apple will establish a dispute settlement mechanism, allowing independent experts to review decisions by Apple to deny access to NFC input.
- Duration and Monitoring: The commitments offered by Apple will remain in force for ten years, with implementation monitored by a monitoring trustee reporting regularly to the Commission.
The public is invited to provide comments on these commitments, which will be considered before any final decision is made by the European Commission. The commitments aim to address competition concerns and foster a more open and competitive environment in the mobile wallet market on iOS devices.
Source: EC Europa