Apple to open access to its iOS payments system to end EU antitrust investigation

Apple Inc. will change a number of its business practices to end a European Union antitrust investigation into its mobile payments system.

The European Commission, the EU’s executive body, announced development today.

Apple’s iPhones and iPads are equipped with an NFC, or Near Field Communication, chip that lets users pay in stores using their mobile phones. NFC lets you make purchases by holding your mobile device near a payment terminal. The technology uses a digital wallet, an application that stores the user’s credit card information, to process transactions.

The European Commission opened an antitrust investigation into Apple’s implementation of NFC in 2020. Currently, users can only make purchases using NFC in stores using the iPhone maker’s Apple Pay and Apple Wallet apps. Third-party payment apps cannot access the technology, which the European Commission has provisionally flagged as a breach of EU competition rules in 2023.

To address regulators’ concerns, Apple earlier this year proposed a change to its NFC implementation. That proposal led to the European Commission’s decision today to close its antitrust investigation into the system. Apple won’t implement its original list of suggestions, but rather a revised version that takes into account feedback the EU gathered from other market participants.

The most significant change to Apple’s mobile payments system is that third-party digital wallet apps will gain access to the NFC chip on iOS devices. This will allow users of those apps to make contactless purchases using payment terminals in stores. As part of its antitrust commitments, Apple has agreed not to charge for NFC access or make it conditional on developers using Apple Pay or Apple Wallet.

Consumers will have the option to set a third-party digital wallet app as their default payment method instead of Apple Pay. If such an app is set as the default method, it will automatically launch when users hold their iPhones up to an NFC payment terminal.

The change Apple made to its antitrust commitments ahead of their acceptance by the EU introduced a number of additional requirements. In particular, the iPhone maker will have to provide a simple way to set a third-party digital wallet as the default payment app on iOS devices. Apple will also allow consumers to make purchases in stores that use a smartphone as a payment terminal.

The company will set up a dispute resolution system for developers who want to challenge NFC access restrictions on their apps. Under Apple’s revised antitrust commitments, the company agreed to set shorter deadlines for resolving such complaints. The iPhone maker will also allow independent reviews of its NFC access restrictions.

“Today’s decision makes Apple’s commitments binding,” said European Commission Executive Vice-President Margrethe Vestager. “It opens up competition in this key sector by preventing Apple from excluding other mobile wallets from the iPhone ecosystem. Competitors will now be able to compete effectively with Apple Pay for mobile payments with iPhone in stores.”

Apple’s commitments are set to take effect on June 25. They will remain in force for 10 years across the European Economic Area, which includes the EU, Iceland, Liechtenstein and Norway. A monitoring trustee appointed by Apple will provide updates to the European Commission on the company’s compliance with the commitments.

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