The European Union is calling out Apple Pay as anticompetitive for the way it allegedly stymies the growth of rival "tap and go" payment services on the iPhone.
On Monday, the European Commission issued a preliminary finding that Apple "abused its dominant position in markets for mobile wallets on iOS devices."
"We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices," European Commissioner for Competition Margrethe Vestager said in a statement.
The antitrust finding centers on the iPhone's near-field-communication (NFC) chip, which is used to facilitate mobile payments to point-of-sale systems at retail stores. In 2020, the EU opened an initial investigation, questioning why Apple held exclusive control to the NFC chip when rivals could leverage the same technology to offer competing mobile payment systems.
“Mobile payments play a rapidly growing role in our digital economy,” Vestager added. “It is important for the integration of European payments markets that consumers benefit from a competitive and innovative payments landscape.”
The resulting preliminary investigation claims the company is restricting competition by preventing other mobile wallet developers from accessing the NFC chip. “This has an exclusionary effect on competitors and leads to less innovation and less choice for consumers for mobile wallets on iPhones,” the Commission added. “If confirmed, this conduct would infringe Article 102 of the Treaty on the Functioning of the European Union (‘TFEU') that prohibits the abuse of a dominant market position.”
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The preliminary ruling paves the way for a larger investigation that could saddle Apple with regulatory fines and force it to open up access to the NFC chip on iPhones and iPads.
But in response, Apple denied any of its conduct was anticompetitive, and noted some mobile payment services, such as PayPal, MobilePay and Swish, have been popular on iPhones in Europe. The company also said it denies uncontrolled third-party to the NFC chip to protect the phone's security while offering a simple, consistent payment experience.
"Apple Pay is only one of many options available to European consumers for making payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security," the company added. "We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment.”
The EU is giving the company a chance to rebut the findings during the ensuing antitrust investigation. For now, the European Commission has given no timetable on when a final ruling will be issued.