EU accepts Apple plan to open iPhone tap-to-pay to rivals

The EU on Thursday approved Apple’s offer to allow rivals access to the iPhone’s ability to tap-to-pay within the bloc, ending a lengthy probe and sparing it a heavy fine.

The case dates back to 2022 when Brussels first accused Apple of blocking rivals from its popular iPhone tap payment system in a breach of EU competition law.

“Apple has committed to allow rivals to access the ‘tap and go’ technology of iPhones. Today’s decision makes Apple’s commitments binding,” EU competition chief Margrethe Vestager said in a statement.

“From now on, competitors will be able to effectively compete with Apple Pay for mobile payments with the iPhone in shops. So consumers will have a wider range of safe and innovative mobile wallets to choose from,” she said.

The EU previously found that Apple enjoyed a dominant position by restricting access to “tap-as-you-go” chips or near-field communication (NFC), which allows devices to interconnect within a very short range, to favor its own system.

Now competitors will have access to the standard technology behind contactless payments to offer alternative tap-to-pay tools to iPhone users in the European Economic Area (EEA), which includes the EU but also Iceland, Liechtenstein and Norway.

Only customers with an Apple ID registered in the EEA would be able to make use of these outside apps, the European Commission said in a statement.

The changes must remain in force for 10 years and a “monitoring trustee” must be chosen by Apple to report to the commission during that period on their implementation.

Apple had risked a fine of up to 10 percent of its total worldwide annual turnover. Apple’s total revenue in the year to September 2023 stood at $383 billion.

“Apple Pay and Apple Wallet will continue to be available in the EEA for users and developers, and will continue to provide an easy, secure and private way to pay, as well as present passes seamlessly from Apple Wallet,” the company said in a statement.

The probe’s conclusion comes at a particularly difficult moment in relations between the EU and Apple, especially over the bloc’s new competition rules for big tech.

The Digital Markets Act (DMA) seeks to ensure tech titans do not privilege their own services over rivals, but the iPhone maker says it puts users’ privacy at risk.

EU, Apple at loggerheads

One of the DMA’s main objectives is to give consumers more choice in the web browsers, app marketplaces, search engines and other digital services they use.

The EU in June accused Apple of breaching the DMA by preventing developers from freely pointing consumers to alternative channels for offers and content outside of its proprietary App Store.

It also kickstarted another probe under the DMA into Apple’s new fees for app developers.

The company could face heavy fines if the DMA violations are confirmed.

In March, the EU slapped a 1.8-billion-euro ($1.9 billion) fine on Apple in a different antitrust case but the company has appealed the penalty in an EU court.

Brussels also forced Apple last year to scrap its Lightning port on new iPhone models, in a change that was introduced worldwide and not just in Europe.

© 2024 AFP