By T. Jayani, JadeTimes News
Apple has agreed to European regulators' demands to allow competitors access to the contactless payments technology on iPhones. This change means that iPhone users will no longer be restricted to using only Apple Pay for mobile payments. This decision highlights the increasing regulatory pressure Apple (AAPL) is facing in the European Union. The company is also at risk of a substantial fine for allegedly violating the EU's Digital Markets Act.
The European Commission, which serves as the EU's executive branch, announced this and other modifications to Apple's business practices on Thursday. These changes aim to foster competition in the mobile payments market for iPhones. Margrethe Vestager, the EU's competition chief, explained that iPhone users will now be able to choose their preferred mobile wallet for in store payments while still benefiting from all iPhone features, such as double click, tap and go, and Face ID.
Apple has until July 25 to implement these changes, which will be in effect for a decade and will apply across the 30 countries within the European Economic Area. Under the new agreement, third party mobile wallet developers will be granted free access to the near field communication (NFC) technology used for contactless payments on iPhones. Additionally, Apple will allow iPhone users to select their default mobile wallet.
Apple stated to us, “We are providing developers in the European Economic Area with the capability to enable NFC contactless payments and transactions for various purposes such as car keys, closed loop transit, corporate badges, home keys, hotel keys, merchant loyalty, ewards, and event tickets within their iOS apps. Apple Pay and Apple Wallet will continue to be available in the European Economic Area for users and developers.”
The European Commission initially raised concerns about Apple’s tap to pay practices in 2022, following a formal antitrust investigation into Apple Pay that began two years prior. Regulators determined that Apple had misused its dominant market position by limiting access to the NFC technology essential for mobile payments. This restriction prevented competitors from developing apps or wallets utilizing iPhones’ tap to pay features, forcing users to rely solely on Apple Pay.
Margrethe Vestager, the EU's competition chief, remarked, “Apple can no longer leverage its control over the iPhone ecosystem to exclude competing mobile wallets from the market. These changes will benefit competing wallet developers and consumers by fostering innovation and choice while ensuring payment security.”
However, these commitments do not apply to Apple Watches. Vestager explained that the number of people using Apple Watches for payments is relatively small, causing "limited harm" by excluding these devices.
