European Union Initiates Antitrust Charge Over Apple’s Mobile Payment System

On May 2, the European Commission (a regulating body of the European Union, or EU) continued a trend by filing a preliminary antitrust charge known as a Statement of Objections regarding Apple Pay. The primary issue in this case is third-party access to near-field communication (NFC, or “tap-and-go”) data. Used for apps such as Google Pay, Samsung Pay, and Apple Pay, NFC only works for data transfer within about 4 inches. Many people consider that small radius a major security benefit and a big reason mobile payment systems have taken off.

In the Statement of Objections, the Commission asserts that Apple “abused its dominant position in markets for mobile wallets on iOS devices. By limiting access to a standard technology…, Apple restricts competition in the mobile wallets market on iOS.” Apple responded in a statement, “Apple Pay is only one of many options available to European consumers for making payments, and [Apple] has ensured equal access to NFC while setting industry-leading standards for privacy and security.” The tech company previously has objected to various provisions outlined by the EU, particularly measures that would broaden developers’ access to the App Store (a source of significant Apple revenues).

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According to the European Commission, initiating an antitrust investigation does not prejudge the outcome of the investigation. A final ruling against the tech giant could lead to fines of up to 10% of Apple’s global revenue (currently about $36 billion) and potentially force changes to the company’s business practices. Apple will have opportunities to respond to the Commission’s list of objections as part of the process.

This latest action follows a ruling in April 2021 that Apple was in breach of EU competition law with its App Store practices, specifically regarding music streaming. The EU also is preparing to implement two new tech regulations in 2023: the Digital Services Act and the Digital Markets Act. The first is designed to force companies to more tightly control harmful content on their platforms, and the second is intended to make it possible for smaller companies to compete with large corporations.