Apple allows competition in iPhone payments in the EU

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Apple allows competition in iPhone payments in the EU
Apple allows competition in iPhone payments in the EU

Banks and other potential competitors had previously argued that it was unfair that they were forced to use software controlled by the tech giant.

Tech giant Apple ‘s commitment to open up competitors’ access to the standard technology used for contactless payments using iPhones – “tap and go” – was enough to allay the European Commission’s competition concerns, the EU executive said today (July 11).

In an investigation launched in June 2020, the Commission found that excluding Apple Pay competitors from the market would limit innovation and choice for iPhone mobile wallet users.

It stated that Apple abused its dominant position by refusing to supply near field communication technology to competing mobile wallet developers and by allowing only Apple Pay to access Apple’s iOS hardware and software to make in-store payments.

Banks and other potential competitors argued that this was unfair, that they were forced to use software controlled by the tech giant.

In January, Apple proposed commitments to address the Commission’s concerns, and in February of this year, the EU executive held consultations with banks and app developers to test these commitments.

After receiving feedback, Apple proposed additional safeguards, including the ability to initiate payments using payment apps on other industry-certified terminals, such as merchant phones or devices used as terminals, and making it easier for users to set the payment app as the default.

European Commission Vice President Margrethe Vestager, responsible for competition, said at a press conference today that these commitments have become legally binding under EU competition rules.

“This opens up competition in this important sector by preventing Apple from excluding other mobile wallets from the iPhone ecosystem. From now on, competitors will be able to effectively compete with Apple Pay for mobile payments using the iPhone in stores. Consumers will have a wider choice of secure and innovative mobile wallets,” said Vestager.

Apple has until July 25 to comply with the commitments. They will be in effect for the next ten years, and the Commission will continue to monitor it. If a company fails to comply, the Commission may impose a fine of up to 10% of its total annual turnover.

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