EU Accepts Apple’s Legal Commitments To Open NFC Access

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Legal commitment over Apple’s NFC-based mobile payments system, which is to be opened to rival payment operators has made “commitments” to the European Union to open up its mobile payment service to rival operators.

And in turn the EU antitrust regulators announced on Thursday that they had accepted the commitments from Apple to allow access to its tap and go mobile payments technology to rivals, bringing an end to a four-year investigation.

The issue began when Apple Pay was introduced way back in 2014. Apple Pay essentially digitised and replaced a credit or debit card chip and PIN transaction at a contactless-capable point-of-sale terminal.

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Four year investigation

But right from the start Apple had restricted third parties’ access to the standardised NFC payment technology in iPhones and other iOS devices.

Consequentially the European Commission began an in-depth probe into the Apple Pay payment technology back in June 2020.

Then in May 2022 the European Commission informed Apple of its preliminary findings that it had unfairly restricted contactless NFC tech in iPhones to benefit of the Apple Pay payment system.

In its investigation, the Commission preliminarily concluded that Apple had abused its dominant position by refusing to supply the NFC input on iOS to competing mobile wallet developers, while reserving such access only to Apple Pay.

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Due the preliminary finding against it, Apple faced possible heavy fines and the prospect that the EU would force it to open up its mobile payment system to competitors, such as banks.

In September 2021 the head of the Commonwealth Bank of Australia had publicly accused Apple of anticompetitive behaviour over its control of payments on its phones.

In December 2023 it was reported that Apple may open the standardised tap-to-pay technology to competitors.

Apple’s “commitments”

Now the European Commission has said that it “has made commitments offered by Apple legally binding under EU antitrust rules.”

“The commitments address the Commission’s competition concerns relating to Apple’s refusal to grant rivals access to a standard technology used for contactless payments with iPhones in stores (‘Near-Field-Communication (NFC)’ or ‘tap and go’),” said the EC.

The move was widely expected after European regulators in April 2024 signalled they were set to approve Apple’s proposal for allowing third parties to access the near-field communications (NFC) technology in iPhones, iPads and other devices.

Apple had initially committed to the following:

  • To allow third-party wallet providers access to the NFC input on iOS devices free of charge, without having to use Apple Pay or Apple Wallet.
  • To apply a fair, objective, transparent and non-discriminatory procedure and eligibility criteria to grant NFC access to third-party mobile wallet app developers.
  • To enable users to easily set an HCE payment app as their default app for payments in stores.
  • To establish a monitoring mechanism and separate dispute settlement system to allow for independent review of Apple’s decisions restricting access.
  • To apply the above mentioned commitments to all third-party mobile app developers established in the European Economic Area (‘EEA’) and to all iOS users with an Apple ID registered in the EEA, also while travelling temporarily outside the EEA.

Between 19 January 2024 and 19 February 2024, the Commission then market tested Apple’s commitments and consulted all interested third parties to verify whether they would remove its competition concerns.

In light of the outcome of this market test, Apple amended the initial proposal and committed:

  • To extend the possibility to initiate payments with HCE payment apps at other industry-certified terminals.
  • To explicitly acknowledge that HCE developers are not prevented from combining the HCE payment function with other NFC functionalities or use cases.
  • To remove the requirement for developers to have a licence as a Payment Service Provider (‘PSP’).
  • To allow NFC access for developers to pre-build payment apps for third party mobile wallet providers.
  • To update the HCE architecture to comply with evolving industry standards used by Apple Pay.
  • To enable developers to prompt users to easily set up their default payment app and redirect users to the default NFC settings page.
  • To comply with the same industry standard-specifications as developers of HCE payment apps and to protect confidential information obtained in the context of an audit.
  • To shorten deadlines for resolving disputes.

US issues

Apple is facing similar issues across the pond over its mobile payments system and other behaviours.

In July 2022 a class action lawsuit was filed in a San Francisco federal courtroom, alleging Apple was thwarting competition for its Apple Pay mobile wallet.

In September 2023 a US judge ordered Apple to face antitrust lawsuit by payment card issuers for over the Apple Pay mobile wallet.

Then in March 2024 the US DoJ and US states filed a case against Apple for violating antitrust laws. More specifically, the case revolves around how Apple has used its locked-down iPhone ecosystem to build a monopoly.

Among the various DoJ complaints was the allegation that Apple is limiting third party digital wallets.