Apple Agrees to Open Up NFC Technology to Rivals, Allowing for Wider Competition in Mobile Payments
The European Commission has announced that it has accepted Apple’s concessions to open up its NFC wireless technology to its rivals, effectively ending the company’s restrictions on contactless payment apps on its iPhone devices.
According to the Commission, Apple’s previous restrictions on NFC technology limited the possibilities of contactless payment, known as "Tap to Pay," on its iPhone phones, thereby favoring its own Apple Pay service and restricting competition. The concessions, which Apple must comply with for ten years, will allow iPhone users to use other payment apps in addition to Apple Pay.
"This is a significant step forward in promoting competition and innovation in the mobile payments sector," said Margrethe Vestager, Vice-President of the European Commission in charge of Competition. "It will allow competitors to effectively compete with Apple Pay for mobile payments with the iPhone in stores, giving consumers a wider range of secure and innovative mobile wallets to choose from."
The Commission began investigating Apple’s practices in 2020, and in May 2022, it formally accused the company of preventing contactless payment app developers from accessing the NFC standard wireless technology on its devices. The Commission found that Apple had abused its dominant position by refusing to provide NFC input on iOS to its rivals, reserving such access solely for Apple Pay.
Under the concessions, Apple will allow third-party mobile app developers to access its NFC system on iOS devices without any additional charge. Apple must provide third parties with access to the HCE (host card emulation) system, which allows for secure storage of payment credentials. The company will also establish an oversight mechanism and an independent dispute resolution system to review its decisions restricting access.
Additionally, Apple has made several other commitments, including expanding the possibility of initiating payments with HCE applications on other industry-certified terminals, removing the requirement for developers to have a payment service provider license, and allowing developers to access NFC technology to pre-create payment applications for third parties.
If Apple fails to meet these commitments, the Commission may impose a fine of up to 10% of the company’s total turnover or a penalty of 5% of its daily turnover for each day of non-compliance.
The concessions will take effect from July 25th next year, and Apple must comply with them for ten years to avoid a multi-million euro fine from Brussels for abuse of a dominant position.
