close
close

Apple opens up payment technology to avoid EU fine

Apple has agreed to share its mobile wallet technology with competitors, thereby avoiding fines in Europe.

The agreement, announced by the European Union (EU) on Thursday (July 11), is binding for a decade, allowing other companies to use the technology for free. It ends an investigation by EU regulators that Apple is abusing its dominant market position by cutting off access to the technology.

Now, consumers in Europe will be able to use alternative digital wallets to make payments, with the agreement lasting 10 years. Violating the agreement could lead to the EU fining Apple up to 10% of its annual global revenue.

“From now on, competitors will be able to compete effectively with Apple Pay for mobile payments with iPhone in stores,” said Margrethe Vestager, vice president for competition policy at the EU. “Consumers will therefore have a wider choice of secure and innovative mobile wallets to choose from.”

Last month, Apple issued a statement indicating that a settlement was possible.

“Following our ongoing discussions with the European Commission, we have committed to providing third-party developers in the European Economic Area with an option that will enable their users to make NFC contactless payments from within iOS apps, independently of Apple Pay and Apple Wallet,” the company told the Financial Times.

The European Commission (EC), the EU’s executive arm, accused the iPhone maker of violating antitrust law in 2022, saying Apple had prevented competitors from accessing its tap-and-go payment technology.

Apple continues to face other regulatory hurdles in Europe. Last month, reports emerged that the EC intended to charge Apple a fee after finding that the company had failed to meet a requirement that app developers be able to direct users to offers outside of Apple’s App Store without charging them a fee.

The company is also appealing a landmark antitrust fine of almost $2 billion imposed by European regulators after the EC found that Apple was abusing its position in the streaming music market. The commission found that the company prevented app developers from informing iOS users about alternative and cheaper music subscription services.

Apple responded by criticizing the European Commission for “failing to prove any credible evidence of consumer harm.”