Apple hit by EU antitrust complaint over iPhone payments (1)

Apple Inc. has been the subject of a formal antitrust complaint by the European Union on how it handles iPhone payment services, an area where regulators say the tech giant favors its own technology over competing platforms.

the European Commission sent a so-called Statement of Objections alleging the company is abusing its control over mobile wallets by limiting how third-party companies can provide services on the iPhone. The move intensifies an investigation that began nearly two years ago. If confirmed, the company could face steep fines under EU antitrust rules.

The issue centers on Apple Pay, which customers can use through the iPhone’s Near Field Communication chip. This allows them to tap to pay, which is not available for competing services, such as PayPal. Apple plans to open up the technology so vendors can use it to accept payments, but customers still won’t be able to use touch to make payments with competing services – a more pressing need for most phone owners.

The situation appears to create an uneven playing field, EU regulators said.

“We have indications that Apple has restricted third-party access to key technology needed to develop competing mobile wallet solutions on Apple devices,” the EU antitrust chief said. Margrethe Vestager said in a statement Monday. The EU indictment makes a preliminary finding that the company “may have restricted competition, to the benefit of its own solution.”

The decision to step up its investigation comes weeks after the EU approved sweeping new rules to limit how US tech companies operate in the region. the measuresdesigned to work alongside traditional antitrust powers, aims to prevent companies from abusing their power as guardians of digital technology.

The Apple Pay investigation was one of two cases that the European Commission open in June 2020, as part of Vestager’s efforts to rein in powerful tech companies. It follows the EU’s decision in 2016 to hit Apple with a record A 13 billion euro ($13.7 billion) tax bill, which is the subject of a pending court case following the company’s successful appeal to a lower EU court.

Read more: Apple is keeping payments technology to itself and Europe has had enough

Apple defends its approach by noting the popularity of competing services on the iPhone. This includes PayPal, which is widespread in Europe, and a few other options that are more popular than Apple Pay in some European countries: MobilePay (Denmark), Swish (Sweden), and Payconiq (Belgium).

The company also said it was giving all banks equal access to the payments system, with 2,500 banks in Europe connected, as well as smaller fintech companies and start-up financial services.

“We designed Apple Pay to provide users with an easy and secure way to digitally present their existing payment cards and for banks and other financial institutions to offer contactless payments to their customers,” Apple said in a statement, saying that he “will continue to engage”. with the Commission to ensure that European consumers have access to the payment option of their choice in a safe and secure environment.

The EU’s decision could pave the way for multibillion-euro fines and an order to change the way Apple does business. But the company will have the opportunity to challenge the EU’s findings in writing and at a hearing.

(Updates with more information on Apple’s technology starting in the third paragraph.)

–With the help of Marc Gurman.

To contact the reporters on this story:
Stephanie Bodoni in Luxembourg to [email protected];
Jillian Deutsch in Brussels at [email protected]

To contact the editors responsible for this story:
Jeremy Hodges to [email protected];
Sarah Frier to [email protected]

Peter Chapman, Nick Turner

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