On July 11, 2024, Apple successfully avoided a potential hefty fine from the European Commission (EC) regarding limitations imposed on mobile payments. The EC had initiated an investigation into Apple’s practices, alleging that the tech giant abused its dominant position on iOS by refusing to allow competing mobile wallet developers to access Near Field Communication (NFC) for payments.
In response to the investigation, Apple has agreed to open access to the iPhones’ NFC chips, enabling third-party apps to use tap-to-pay functionality. This was previously exclusive to Apple Pay, but the EU has now mandated a change.
The EC accepted Apple’s concessions, which include allowing third-party wallet providers access to NFC, ensuring a fair, objective, transparent, and non-discriminatory procedure for granting NFC access, and enabling users to set a default app for mobile payments that is not Apple’s.
Additionally, third-party mobile payments will be able to secure transactions using the passcode, Touch ID, or Face ID. Apple is also required to establish a monitoring mechanism and separate dispute settlement system for independent review of decisions restricting access.
These provisions apply to 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. The functionality will continue to work temporarily for these users while traveling outside of the EEA.
These terms are legally binding for Apple and will remain in force for ten years. The EC will monitor the implementation through a trustee appointed by Apple who will report to the EC.
Margrethe Vestager, the EC’s VP in charge of competition policy, stated that Apple has committed to allowing rivals to access the ‘tap and go’ technology of iPhones. This decision, she said, opens up competition in the mobile wallet sector, preventing Apple from excluding other mobile wallets from the iPhone’s ecosystem. As a result, consumers will have a wider range of safe and innovative mobile wallets to choose from.
