European Commission informs Apple of preliminary finding that it unfairly restricted contactless NFC tech in iPhones to benefit of Apple Pay payment system
The probe could lead to heavy fines for the tech giant and force it to open up its mobile payment system to competitors, such as banks.
The Commission said it has informed Apple of the findings in an official document known as a Statement of Objections, following an in-depth probe into the company’s Apple Pay payment technology initially launched by the EU’s executive in 2020.
The Commission said the firm had restricted competitors’ access to the standardised Near-Field Communications (NFC) contactless technology in its iOS devices, constituting an abuse of its dominant position in mobile wallets for iOS devices such as iPhones.
“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices,” said Margrethe Vestager, Commission executive vice-president in charge of competition policy.
“In our Statement of Objections, we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay.”
She added that if confirmed, the conduct would be “illegal under our competition rules”.
Apple Pay is the only mobile wallet system allowed to access the necessary NFC technology in iOS devices, which isn’t made available to third-party mobile wallet developers, the Commission said.
It said its preliminary view is that this has “an exclusionary effect on competitors and leads to less innovation and less choice for consumers for mobile wallets on iPhones”.
The Statement of Objections doesn’t prejudge the outcome of the investigation, the Commission added.
The agency noted that the statement takes issue only with NFC access by third-parties, and not with other issues included in the June 2020 investigation, such as online restrictions or alleged refusals of access to Apple Pay for rivals’ specific products.
“Apple Pay is only one of many options available to European consumers for making payments,” Apple said in a statement.
It added the system “has ensured equal access to NFC while setting industry-leading standards for privacy and security”.
Apple has in the past said limitations on its NFC technology are required for security purposes.
Last week the company reported net profits of $25 billion (£20bn) for the quarter ended 26 March, up from $23.6bn for the same quarter a year earlier, on revenues of $97.3bn, up from $89.6 year-on-year.
It added that supply chain problems could erode sales by as much as $8bn in the current quarter.