EU Commission Says Apple Pay Abused its Dominant Position on iOS

Posted on May 2, 2022 by Laurent Giret in Apple with 37 Comments

The European Commission announced today that it has sent a “Statement of Objections” to Apple with the preliminary view that the company’s Apple Pay mobile wallet solution has abused its dominant position. The Commission has pointed out the fact that Apple has refused to let mobile wallet app developers access the NFC input on its iPhones, which is restricted to Apple’s own Apple Pay solution.

“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices. In our Statement of Objections, we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay. If confirmed, such a conduct would be illegal under our competition rules,” explained Margrethe Vestager, the Executive Vice-President of the EU Commission in charge of competition policy.

Apple’s argument to restrict its NFC technology to Apple Pay is that it benefits the security of iOS users, but Vestager dismissed that. “Our investigation to date did not reveal any evidence that would point to such a higher security risk. On the contrary, evidence on our file indicates that Apple’s conduct cannot be justified by security concerns,” she explained during a news conference.

The sending of a Statement of Objections is an important initial step in the opening of a formal antitrust investigation by the European Commission. If Apple’s access restrictions to its mobile payment technology are found the break the EU’s competition rules, the company could be facing a fine of up to 10% of its global turnover, or $36.6 billion based on the company’s revenue last year.

In a statement shared with Reuters, Apple pretty much said that it doesn’t see its Apple Pay solution as a monopoly. “Apple Pay is only one of many options available to European consumers for making payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security,” the company said in a statement.

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Comments (37)

37 responses to “EU Commission Says Apple Pay Abused its Dominant Position on iOS”

  1. wright_is

    Strange, I have to use the Apple Wallet on my iPhone, if I want to make NFC payments. My banks payment app can't access the NFC on the iPhone, unlike on my Android phone, and only informs me of completed transactions. The transactions themselves have to go through a third party (Apple).

    Given my bank is bound by banking secrecy laws and Apple isn't, I'd like to have the option to take Apple out of the loop - the bank can't use my transaction information to sell me other products, it can't share or sell my information with third parties.

    • red.radar

      In the US there doesn't exist such banking secrecy laws and as such Apple does provide a necessary buffer of privacy. US banks will sell your transaction information to the highest bidder in a heart beat.

      • red.radar

        I retract my statement. US bank still knows who you transacted with and the amount. Doesn't matter if it goes through their network or Apples.

        • Jeffsters

          That’s not as valuable as what you bought. It’s not just banks. Retailers know what you bought but not who you are (no PII) which is why some retailers, such as Walmart, don’t take it but blame the additional .05% transaction fee.

    • Jeffsters

      As a person that was on the team to support ApplePay I can say there is remarkably little valuable data swapped as part of a transaction. Literally nothing. It’s tokens and randomly generated transaction based identifiers. I can say if Apple had a data breach and my bank had one I’s have literally zero concern on the Apple side. Apple pledges NOT TO SELL YOUR DATA my bank never mentions it explicitly. I trust my bank with my money, because it’s FDC insured, my data? Not so much.

    • lvthunder

      Don't the cards from the bank do tap to pay? I know the newer ones in the US do. So if you don't like Apple Pay just use the card itself. Apple should be allowed to have unique features that others can't use. If not every phone will be the same.

      • wright_is

        Yes, we’ve had tap to pay for over half a decade now, so, yes, I do use my card a lot - that Apple only supports a handful of banks is also annoying, considering that nearly all of them have payment apps on Android.

        The question is, if I have an NFC capable smartphone, why shouldn’t I be able to chose between using my bank or the phone maker for payments?

        • Chris_Kez

          Is it that Apple only supports a handful of banks, or that only a handful of banks support Apple?

    • Stabitha.Christie

      " the bank can't use my transaction information to sell me other products, it can't share or sell my information with third parties."

      Apple can't either, Apple Pay doesn't collect information about your purchases.

      One feature of Apple Pay is everything is managed via a one time token so it doesn't pass on your information or your bank card information to the merchant. So the merchant cannot tie your purchases to you and build a profile around you and your purchasing habits (this may not be an issue in the EU but it is in the U.S)

      That said, If you don't want to use Apple Pay or want Apple out of the transaction altogether, I think that is reasonable and doesn't really require explanation.

  2. spiderman2

    apple? what a surprise /s

  3. toukale

    We need to be careful on how we go about some of those decisions. If the EU wants to have its cake baked that way, tech companies can drastically change the way they go about future products. I can see Apple/Google close their stores for future products. How about instead of developers develop for a product, instead Apple/Google use the old telcos way of buying things they like or commission certain software publish it to their own store. That way we have no 3rd party to deal with, the product is completely closed to everyone but the owner.

    If I were Apple/Google I would certainly be looking at that idea, remember that's how the iPhone launched before the appstore. I will be paying close attention to how those companies adjust to those new laws because right now it seems the current rule of the game are changing to minimized the platform owners advantages. Creating a successful platform, takes time, lots resources and efforts in audition to luck.

    • bmcdonald

      Do you think anyone actually cares if "tech companies drastically change the way they go about future products?" Or close their stores?

      The EU is massive market with almost limitless profit potential. The Apples of the world will either fall in line or get left behind (and out of the cash cow) if they insist on "protecting my security".

      It's my phone - I should be able to use any banking app that I want without Apple sticking their nose in under the guise of trying to "protect" my security.

      All I know is my "old school" debit and credit cards stick work/tap just fine - I will use whatever I need to get the job done.


      • arjay

        People in the EU are going to be spending so much on power and food that they won’t be able to afford their smartphones.

        • bkkcanuck

          If that were true, Apple would suddenly be selling next to no products since that is not just EU... that is in every developed nation.... however, there are many things people will give up before their Smartphone... so Apple will be fine...

          • wright_is

            Yes, but the price rises are steep and expected to climb even higher. Fuel has gone from $6 a gallon in December to $9.60 in April and expected to rise further.

            Likewise, heating bills are expected to rise by over $1,000 this year for an average family. Putting off unnecessary upgrades or dropping unnecessary subscriptions is going to be on the cards for a lot of people going forward. I switched my desktop Ryzen 1700 for a Mac mini M1 at the end of last year, to save on electricity costs, that was before the Ukraine invasion started. Heating & electricity was predicted to rise 30% this year, just due to COVID and inflation, the invasion is at least doubling that figure.

    • GarethB

      Android already has APIs for NFC access. Many OEMs already use it - eg Samsung Pay.

      It's not like Google foists 'Google Pay' on everyone, like some.. kind.. of.. monopolist.

  4. red.radar

    The only thing I find interesting is that Apple has to grant access to the hardware to allow their competitors to develop a competing solution. That is bizzare.

    In the mobile payment space I see the validity of the complaint as Apple didn't develop NFC technology. They incorporated a standards off the shelf based periphal and just put a punitary block on others from accessing the hardware. But for something like AirTags. Apple clearly invested in developing UltraWide Band technology for the purpose of making locating devices easier. Forcing Apple to give that advantage away because they own the platform seems unfair. It de-incentivizes investment in improving the platform.

    This isn't cut and dry in all situations.

    • toukale

      Agree with that assessment, it gives me pause this will probably not stand as is in the final stage. If Apple has to open this up then Apple will need to charge a fee (whatever it be) to those who wants access. It did not costs Apple zero to add this feature. I think the same rule should Apply to everything on the platform. Want access to api's there is a fee, want access to x, y, z (fee). Basically restructure the whole thing to still get their cut, you can say bye, bye to a lot of those free apps.

  5. Bart

    Only thing to consider here is that NFC is not an Apple only feature. As such, Apple can't claim that only Apple Pay should work on an iPhone.

    • toukale

      What kind of reasoning is that? Did anyone help pay for those chips? If the answer is no then Apple should charge a fee to have access it.

    • Jeffsters

      It’s not just NFC. The reason Apple’s implementation, as usual, has such a better user experience is the entire system including the Secure Enclave. Apple opening it up risks compromise of the OS itself.

  6. red.radar

    The final ruling here will have ripple effects on other Apple products. Ultra Wide Band radio technology for Airtags and maybe even the forced pairing of Apple watch to an Iphone.

  7. lvthunder

    The US big tech companies should all just pull out of Europe. It is clear that they want every phone and service to be equal and have nothing unique. If you don't want to use Apple Pay then use a non-Apple device. It's simple. Credit/Debit cards themselves have tap to pay. I trust the security of the Apple engineers more than some EU government bureaucrat. The competition should be on the phone level. Not each individual service the phone offers.

    • wright_is

      The banks have been doing tap to pay longer than Apple and they have extra restrictions on what they can do with the data that Apple doesn’t.

    • whistlerpro

      I never get these kinds of comments, don't people realise how much money a company like Apple makes in Europe? Apple has 52% market share of smartphones in the UK alone, why would you leave that money on the table just because you need to jump through a few hoops.

      • bkkcanuck

        UK is irrelevant now in discussions about Europe.

      • arjay

        Because it’s not just a few hoops. It is a set of changes that makes all their other customers face higher risks.

        • wright_is

          What higher risks? If you want to use Apple Pay, just don't install your banks payment app, simple. If you trust Apple more than your bank, don't put the bank's software on your phone, if you live somewhere where banks have more restrictions on what they can do with your data than Apple does, you would probably feel more comfortable using the bank's app directly.

          It is about choice. Nobody is saying Apple Pay has to go away, just that if you trust your bank more than Apple with your financial information, you should have the option of giving the bank the information and not Apple. Google has more at stake in losing such information, as it actively uses and sells users information, yet it has allowed third party payment apps to use the NFC for years.

    • red.radar

      That would be incredibly short sighted. EU is not the only group of nations looking to regulate Big Tech. Its better for all if we standardize around a set of regulations. Similar to GDPR.

      The Internet Revolution is maturing. Just like the industrial revolution before, It was only a matter of time before regulations started to be enacted.

  8. will

    Off all the things Apple does, I do not consider Apple Pay to be a high concern of monopoly. It is up to the bank if they want to use it, Apple just ensures that only the banking data is passed, not personal info.

    I do think it would benefit Apple to lead the way for privacy, but not lock that way to only be Apple services using only Apple products.

    • wright_is

      Except the bank can’t, because only Apple Pay/Apple Wallet can use the NFC. On Android, the bank can add their own payment app, bypassing the secondary data handler.

      As the banks have been doing tap to pay longer than Apple and are bound by banking secrets laws, I would prefer to use the bank’s app directly. As it is, I don’t have a choice, if I want to use my iPhone for payments.

      • toukale

        It costs Apple money to include the NFC chip in the phone, why should others have access to it for nothing. If Apple has to give access to the iPhone NFC then a fee should be associated with it. I have no problem if that is the case.

        • Jogy

          It costs Apple money to include speakers in the phone, why should others have access to it for nothing? If Apple has to give access to the iPhone speakers then a fee should be associated with it. I have no problem if that is the case. /sarcasm

        • wright_is

          The screen is much more expensive than the NFC (it costs a couple of cents), why should other apps get access to the screen for nothing? Oh, wait, they don't, they have to pay Apple every year for a developer license.

        • GarethB

          Of course, if Apple were selling their device to customers as a cut-price device your argument might make sense. Apple sells these to their customers at a premium, as a premium phone and is undoubtedly already reaping plenty from the device sale.

          Do you think Apple would prefer to sell the device with an additional charge to be able to use others NFC software? Like some cut-price Kindle with Ads?

      • Jeffsters

        ApplePay is soooooooo much more than an NFC chip and “data handler”. It dives deeply into the foundation of everything security on iOS. Not going to happen unless Apple can create a second tier pure Google-like NFC API without Fingerprint or FaceID. It’s so weaved into everything I can’t see it. But they’ve surprised me before!