European Commission makes Apple’s commitments legally binding under EU antitrust rules

ISTANBUL

The European Commission announced on Thursday that Apple’s commitments on contactless payments have become legally binding under EU antitrust rules.

The commitments respond to the European Commission’s competition concerns about Apple’s refusal to give competitors access to the standard technology used for contactless payments with iPhones in stores, also known as Near-Field-Communication (NFC) or tap and go.

“These commitments address our initial concerns that Apple may have illegally restricted competition in the market for mobile wallets on iPhone,” EU Competition Commissioner Margrethe Vestager said in her speech.

“Apple has built a closed ecosystem around its devices and their operating systems. And within that ecosystem, there are many markets for services. Among those services are mobile payment applications – so-called ‘mobile wallets’. Mobile wallets enable payments to be made using a mobile device, in stores and online. They also integrate other services, such as loyalty cards, contactless event tickets, boarding passes or digital credentials,” she explained.

Vestager said preliminary findings from the EU in 2022 showed that Apple was abusing its dominant position by restricting access to the technology needed to make payments using iPhones.

“NFC technology was not developed by Apple. It is a standardized technology,” she said, adding that the investigation led to three preliminary conclusions.

“First, Apple has a significant presence in the smart mobile device market. Second, Apple dominates the NFC and mobile wallet functionality for iPhones. Third, Apple has refused to provide access to NFC technology on the iPhone to competing wallet developers. Instead, Apple has reserved use of NFC technology on the iPhone for its own mobile wallet solution,” she said.

Vestager said Apple’s conduct prevented software developers from introducing new and competing mobile wallets for iPhone users, and that Apple unfairly protected its own mobile wallet from competition while excluding others.

The commissioner said the commitments by the US-based global technology company end the EU’s investigation into Apple Pay.

“These commitments will enable iPhone users to use their preferred mobile wallet to pay in stores. They will be able to do so using all of the features of iPhone, including tap-and-go, Double-Click, and FaceID. Finally, the commitments will run parallel to Apple’s commitments under other regulations,” she added.

Apple’s commitments include enabling third-party wallet providers to access the NFC input on iOS devices for free, without having to use Apple Pay or Apple Wallet, and using a fair, objective, transparent and non-discriminatory process and eligibility criteria for granting NFC access to third-party mobile wallet app developers.

Apple also agreed to create a monitoring mechanism and a separate dispute resolution system to allow for independent review of Apple’s decisions to restrict access.

These commitments apply to all third-party mobile app developers based in the European Economic Area (EEA) and to all iOS users with an Apple ID registered in the EEA, including when temporarily outside the EEA.

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