In a bid to settle a longstanding competition investigation, the European Union has reached an agreement with Apple regarding the operation of Apple Pay. Commission EVP Margrethe Vestager, in charge of the EU’s competition division, announced this development during a press conference on Thursday, as detailed here.
Apple has been given until July 25 to make changes that would allow developers of other mobile wallets to offer contactless payments using the predominant NFC technology in the EU. This will enable them to provide users with “tap and go” payment options, along with access to key iOS features like double click to launch apps, and authentication methods such as Face ID, Touch ID, and passcodes.
Furthermore, Apple will allow users to set a third-party wallet app as their default choice instead of Apple Wallet.
The EU’s competition division initiated a formal investigation of Apple Pay, Apple’s mobile payment and wallet technology, in June 2020, following multiple complaints. Initially looking at Apple Pay as a whole, the probe later centered on the use of Apple’s technology for contactless payments.
Based on preliminary findings announced in May 2022, the EU concluded that Apple had exploited its dominant position to prevent competitors from offering NFC-enabled contactless payments on the iPhone. This hindered the development of rival mobile wallets, resulting in unfair competition against Apple Pay.
Apple was presented with the EU’s Statement of Objections in May 2022 and responded by offering changes to settle the case in January 2024. These changes included granting third parties access to NFC functionality on iOS devices through a set of APIs at no cost, excluding access to the secure element used for transaction security in Apple Pay.
Stronger Commitments
Vestager confirmed Apple’s revised offer after pushing for enhancements. She emphasized the negative impact of excluding competitors from the market and highlighted the importance of innovation and consumer choice under EU competition regulations. Apple’s commitments, made earlier this year, were scrutinized, refined, and accepted by the EU to address these concerns.
In response to industry feedback, Apple enhanced its commitments by removing certain requirements for developers, updating HCE architecture, and expediting dispute resolution processes, among other adjustments. These enhancements are detailed in the Commission’s press release.
The EU’s Digital Markets Act, aimed at promoting competition in digital markets, played a role in reshaping the antitrust landscape, including the Apple Pay case. The act requires major platforms like Apple’s iOS to provide equitable access to infrastructure, preventing them from blocking competitors.
Apple ensured compliance with DMA requirements in its proposed changes for Apple Pay, going beyond the obligations set by the legislation. Vestager commended these commitments, noting their positive impact on competition and innovation while maintaining secure payment processes.
The binding commitments imposed on Apple for a decade aim to foster competition, benefitting both developers and consumers by enhancing choice and innovation while upholding payment security standards.
Apple’s pledge to offer NFC contactless payments and transactions for various purposes within the European Economic Area through Host Card Emulation APIs signifies a step towards providing a seamless and secure payment experience for users and developers.
