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Apple will give competitors access to NFC technology on iOS devices

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Apple has committed to transferring its technology that enables contactless payments using iPhones in stores to competitors. The European Commission (EC) has deemed the move legally binding on the company.

Apple has its own Apple Pay mobile wallet, which lets iPhone users pay with their phones in stores and online. Because Apple devices run exclusively on Apple's iOS operating system, the company controls every aspect of how that ecosystem works, including the terms of access for developers of other mobile wallets.

Apple will provide competitors with access to technology

The EC was concerned that in stores supporting the iOS system, payments can only be made using Apple Pay. Only this application has access to the hardware and standard technology used for contactless payments with iPhones in stores, the so-called Near-Field-Communication (NFC) and the Tap&Go contactless payment function, because Apple does not grant access to its system to other developers.

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In its investigation, the EC initially concluded that Apple is abusing its dominant position by refusing to provide iOS entry to competing mobile wallet developers, reserving such access only for Apple Pay. According to the EC, Apple’s refusal excluded Apple Pay’s rivals from the market, led to less innovation and limited choice for iPhone mobile wallet users. This violates Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits abuse of a dominant position.

In answer Apple pledges to give competitors access to NFC input on iOS devicesand other industry-certified terminals, free of charge and without the need to use Apple Pay or Apple Wallet. This will allow payments to be made safely using other mobile wallets as well.

The company also promised to allow users to easily set new payment apps as defaults and use the same features and authentication tools that are currently used with Apple Pay, such as Touch ID and Face ID. The company will also establish a monitoring mechanism and a separate dispute resolution system, which will allow for independent review of any decisions by Apple to restrict access.

Brussels has recognised the commitments as legally binding

The EC found that Apple's commitments address concerns about the company's breach of antitrust rules and made them legally binding on the company. They will be valid for 10 years and will cover all third-party mobile app developers based in the European Economic Area (EEA) and all iOS users with an Apple ID registered in the EEA. The implementation of the commitments will be monitored by a trustee appointed by Apple, who will report to the EC.

“Paying with your phone is safe and convenient. Apple is committed to giving rivals access to the technology. Today's decision makes Apple's commitments binding. It opens up competition in this key sector, preventing Apple from excluding other mobile wallets from the iPhone ecosystem,” said Margrethe Vestager, deputy head of the European Commission.

She added that now competitors will be able to effectively compete with Apple Pay in the field of mobile payments, and consumers will have a wider range of safe and innovative mobile payment methods to choose from.

The EC initiated formal antitrust proceedings against Apple in June 2020.

Main image source: Gabo_Arts/Shutterstock

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