Apple accused by EU of breaching competition law on contactless payments

BRUSSELS (Parliament Politics Magazine) – Apple has been charged by the European Commission of abusing its market advantage in contactless smartphone payments.

It said the US corporation may have infringed competition law by prohibiting rivals from using its “tap and go” technology, according to a preliminary investigation.

Apple has denied the charge and stated that it will cooperate with the Commission.

If the charges are sustained, the company may face a fine on about 10% of its global turnover, which was $36.6 billion (£29.2 billion) last year.

In a statement, EU Vice-President Margrethe Vestager said that they had indications that Apple limited third-party access to critical technology necessary to develop competitor mobile wallet solutions on Apple devices.

They preliminary discovered that Apple might have hindered competition to benefit its own solution, Apple Pay, said the EU official in charge of competition policy.

Less innovation means less choices

This behaviour by Apple, according to the Commission, has a “exclusionary effect” on competitors and “leads to less innovation and fewer choices for consumers for mobile wallets on iPhones.”

In response, the IT behemoth stated that their payment mechanism was just one of many available to European customers.

It also claimed to have “ensured equal access” to mobile payment technology, as well as “creating industry-leading standards” for security and privacy.

Apple Pay was designed to give users a secure and an easy way to digitally present their existing payment cards, as well as enabling banks and other financial institutions to facilitate contactless payments to their clients, the company said in a statement.

They would continue to work with the Commission to ensure that European consumers had access to their preferred payment option in a safe and secure environment, it added.

The EU antitrust regulators, on the other hand, said their study had turned up “no evidence” that a more open design would pose a “greater security risk.”

Ms Vestager stated that on the contrary, material in their file indicated that Apple’s behaviour couldn’t be justified by security concerns.

Apple has also been accused of anti-competitive conduct dating back to 2015, when Apple Pay was launched.

Apple Pay is accepted by over 2,500 European banks, and Apple handsets account for around a third of the market in Europe. The EU intends to introduce new laws for technology companies next year, as outlined in its Digital Markets Act.

Last year, after competitor business Spotify filed a complaint, EU regulators accused Apple of undermining competition in music streaming markets.

Eleni Kyriakou

Eleni is a journalist and analyst at Parliament Magazine focusing on European News and current affairs. She worked as Press and Communication Office – Greek Embassy in Lisbon and Quattro Books Publications, Canada. She is Multilingual with a good grip of cultures, eye in detail, communicative, effective. She holds Master in degree from York University.