Apple has made a set of commitments to address concerns raised by European Union competition regulators regarding NFC payments and mobile wallet technology on iOS, its mobile operating system. The EU believes that Apple has been unfairly favoring its own mobile payment technology, Apple Pay, and limiting the ability of rivals to develop competing contactless payment options on its mobile platform.
The proposed commitments entail allowing third-party mobile wallet and payment service providers to access NFC functionality on iOS devices, free of charge, via a set of APIs. This access would not require the use of Apple’s own payment technologies.
Although Apple is not offering access to a special chip called the secure element used in Apple Pay transactions, it has proposed granting “equivalent access” to NFC components through “Host Card Emulation (‘HCE’) mode”, which securely stores payment credentials and completes transactions using NFC.
These commitments would apply to all third-party mobile wallet app developers in the European Economic Area and to all iOS users with an Apple ID registered in the region. Apple has also agreed not to prevent the use of these apps for payments in stores outside the EEA.
Additional features and functionality, fair eligibility criteria and a dispute settlement mechanism are also part of the pledges offered by Apple to third parties.
The European Commission has been investigating the Apple Pay competition concerns since 2020, with the first charges brought in May 2022. The consultation period for feedback on Apple’s offer is ongoing, and the Commission will make a decision on whether to accept the proposed commitments after considering the feedback.
If accepted, the commitments would be in force for ten years, with an independent monitoring trustee appointed to ensure compliance. Failure to honor the commitments could result in fines of up to 10% of Apple’s worldwide turnover.
The case also relates to the Digital Markets Act (DMA), legislation Apple is subject to as a designated “gatekeeper”. The DMA aims to prevent abuses of dominance in digital markets, and Apple’s cooperation with the proposed commitments may influence the outcome of the case under this new legislation.
