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[To Eurosmart members only]
Apple wallet: Commission’s preliminary investigation found that Apple abused its dominant position
Today, the European Commission sent a Statement of Objections to Apple. The Commission strongly suspects that Apple may have illegally distorted competition in the market for mobile wallets on Apple devices. Executive Vice-President Vestager even states that “on a preliminary basis, we have found that Apple abused its dominant position”.
Margrethe Vestager explains that Apple restricted access to key inputs that are necessary to develop and run mobile payment apps. In Europe, most payments in shops made with a mobile phone rely on NFC technology. The technology allows for communication between the customer’s mobile device and the shop’s payment terminal. Apple Pay relies on NFC, it is by far the largest NFC-based mobile wallet on the market.
Margrethe Vestager further observes that Apple has stifled innovation by “refusing others to access NFC on its devices”. She also explains that “neither the NFC standard nor the terminal infrastructure are property of Apple. Our concerns relate to Apple’s decision to block access to the NCF technology for payment purposes and use it solely for its own mobile wallet, Apple Pay.” As a result, users cannot use other wallets than Apple Pay. The European Commission found evidence that some developers did not go ahead with their plans because they could not reach iPhone users.
Apple justifies this behaviour by claiming that there are security reasons, security risks would increase if access were to be granted to third parties. However, the Commission’s investigation could not substantiate this argument. “On the contrary, evidence on the file indicates that Apple’s conduct cannot be justified by security concerns”, explains Margrethe Vestager.
She also adds that, when it enters into force, the Digital Markets Act, will require gatekeepers to ensure interoperability with hardware and software features they use themselves in their ecosystems.
Next steps:
Apple is now given the opportunity to answer the European Commission’s concerns.
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