EU approves Apple’s plan to give rivals iPhone contactless payment feature

The case dates back to 2022, when Brussels first accused Apple of blocking competitors from accessing its popular tap-as-you-go payment system on the iPhone – Copyright AFP Richard A. Brooks

Raziye Akkoc

The EU on Thursday approved Apple’s bid to allow rivals to access the iPhone’s contactless payment feature in the bloc, ending a long-running investigation and sparing the company a hefty fine.

The case dates back to 2022, when Brussels first accused Apple of blocking competitors from accessing its popular contactless payment system via iPhone, in breach of EU competition law.

“Apple has committed to giving rivals access to the tap-and-go technology of iPhones. Today’s decision makes Apple’s commitments binding,” EU competition chief Margrethe Vestager said in a statement.

“Now, competitors will be able to effectively compete with Apple Pay for mobile payments with iPhone in stores. This will give consumers a wider choice of secure and innovative mobile wallets,” she said.

The EU has previously said Apple enjoys a dominant position by restricting access to tap-as-you-go or near-field communication (NFC) chips, which allow devices to connect to each other within a very short range, thus favouring its own system.

Now, competitors will have access to industry-standard contactless payment technology, allowing them to offer alternative contactless payment tools to iPhone users in the European Economic Area (EEA), which includes the EU as well as Iceland, Liechtenstein and Norway.

The European Commission in its statement said that only customers with an Apple ID registered in the European Economic Area will be able to use these external applications.

The changes must remain in effect for 10 years, and Apple must select a “monitoring trustee” to report to the commission on their implementation during that period.

Apple risked a fine of up to 10 percent of its total worldwide annual turnover. Apple’s total revenue in the year to September 2023 was $383 billion.

“Apple Pay and Apple Wallet will continue to be available in the European Economic Area for users and developers, providing an easy, secure and private way to pay and a seamless card presentation experience from within Apple Wallet,” the company said in a statement.

The investigation’s conclusions come at a particularly difficult time in EU-Apple relations, especially in the context of new competition rules for big technology companies.

The Digital Markets Act (DMA) aims to ensure tech giants do not favour their own services over those of their competitors, but the iPhone maker says it puts user privacy at risk.

– EU and Apple in conflict –

One of the primary goals of the DMA is to provide consumers with greater choice in the web browsers, app stores, search engines and other digital services they use.

In June, the EU accused Apple of violating the DMA by preventing game developers from freely directing consumers to alternative channels offering deals and content outside the proprietary App Store.

It also triggered another investigation under the DMA into Apple’s new fees for app developers.

If DMA violations are found to be true, the company could face significant fines.

In March, the EU fined Apple 1.8 billion euros ($1.9 billion) in another antitrust case, but the company appealed the fine to an EU court.

Last year, Brussels also forced Apple to abandon the Lightning port on new iPhone models, a change that was rolled out worldwide, not just in Europe.