Margrethe Vestager, EU Executive VP, Competition Policy, is pursuing big tech once again, this time hitting Apple (NASDAQ:AAPL) with anti-trust charges.
Today in a public statement, the European Commission said it has sent a Statement of Objections to Apple regarding its view that it abused its dominant position in markets for mobile wallets on iOS devices. The EU believes that by limiting access to its NFC technology for contactless payments Apple restricts competition in the mobile wallets market on iOS.
Vestager commented on the move:
“Mobile payments play a rapidly growing role in our digital economy. It is important for the integration of European Payments markets that consumers benefit from a competitive and innovative payments landscape. We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices. In our Statement of Objections, we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay. If confirmed, such a conduct would be illegal under our competition rules.”
In a speech on the matter, Vestager stated:
“Apple has built a closed ecosystem around its devices and its operating system, iOS. And Apple controls the gates to this ecosystem, setting the rules of the game for anyone who wants to reach consumers using Apple devices. But other app developers depend on the access to this ecosystem to develop innovative mobile wallets.
The potential for innovation in this space is enormous. But this innovation has been prevented by Apple refusing others to access NFC on its devices. As a result, various features of mobile wallets, such as financial complementary services, are simply not available. Because Apple is not challenged, it has little incentives to innovate itself.
And this is important. Because this market is growing fast. Today, Apple Pay, is by far the largest NFC-based mobile wallet on the market.”
Vestager added that when the Digital Markets Act goes into effect, it will require interoperability – including NFC for mobile payments. She added that Apple has been operating a closed system since 2015, which “may have distorted competition.”
Apple has been a trailblazer in the payments sector. While starting slowly, Apple Pay has now become a very popular digital wallet. It enables users to keep credit and debit cards stored on a device to be used electronically. Apple also operates a peer-to-peer cash transfer feature, and a bespoke credit card in partnership with Goldman Sachs. Apple has long insisted that its concern for privacy and security compels it to offer a closed garden service – and this is something its customers appreciate.
The EU did not mention, nor list firms that have complained about Apple.
Apple will now be expected to respond to the allegations.