Apple is threatened with a high competition fine from the EU because of the foreclosure of its payment service Apple Pay. According to preliminary investigations by the EU Commission, the US technology company is abusing its market power by restricting access to a standard technology for contactless payments on its mobile devices such as the iPhone. This would be a violation of EU competition rules, said Vice-President Margrethe Vestager.
With the delivery of a statement of objections to Apple on Monday, the Dane initiated the next stage of an EU competition procedure, which is already the second major one against the US company. Apple can now respond to the allegations and try to dispel them with changes. If the competition watchdogs then stick to their assessment, the group could face a high fine.
Vestager did not want to speculate about the possible height on Monday. She only made it clear that Apple’s sales with the payment service should be the basis. Theoretically, companies risk fines of up to 10% of their annual global turnover for breaching EU competition rules. At Apple it was last at 365.8 billion dollars (currently 347.5 billion euros).
Specifically, the Commission accuses Apple of purposefully hindering competition in the field of mobile wallets. If, for example, banks want to bring their cards into the digital purse on the iPhone – called “wallet” – this can only be done via integration with Apple Pay. Even competing purse providers can’t get a foot in the door on the iPhone.
Above all, banks criticize the fact that they cannot access the NFC radio chip via Apple, which allows you to use the phone at the checkout instead of a bank card. Apple Pay is the only way to get access to the NFC chip on iPhones. If banks or other companies want to offer their own payment solution on the iPhone without Apple Pay, they have to resort to more cumbersome data transmission methods such as scanning QR codes. Access to the NFC antenna is technically via a separate security chip, the so-called “Secure Enclave”, in which Apple also secures other data that is particularly worthy of protection, such as passwords.
Apple sees its approach as a solution to ensure security and privacy in payments and ensures that anyone who wants access to Apple Pay will get it. However, Vestager replied on Monday that the investigations so far had not revealed any evidence that third-party access to the NFC chip entailed a higher security risk. Apple’s behavior prevents innovation and competition.
In a first reaction to the Brussels decision, the iPhone group emphasized that Apple Pay is just one of many payment options for European consumers, grants everyone the same access to the NFC chip and sets standards in security.
The procedure for Apple Pay is the second major one against the tech group that is now in the final phase. Last year, the commission officially accused Apple of unfair competition in its app store on iPhone and iPad. Accordingly, Apple disadvantages other providers of music streaming apps and therefore has to fear a penalty.
In both cases, it is also about the fundamental question of how far Apple has to open up its platforms to the competition. At its core, the answer to that hinges on whether you view the iPhone ecosystem as a distinct market — then you might view Apple as a monopolist that needs to open up its platforms to competitors. From the group’s point of view, however, Apple must be viewed as just a player in larger markets, which would give it greater scope for structuring the business on its platform.
Vestager made it clear Monday that she has high hopes for the recent Digital Markets Act (DMA) deal. The law will oblige particularly large and powerful companies – so-called gatekeepers – to ensure interoperability with software and hardware that they use in their system, she said. “This includes access to NFC for mobile payments.”
Source: Nachrichten
