EU Accepts Apple's Pledge to Open 'Tap to Pay' iPhone Tech to Rivals
The European Union has accepted Apple's agreement to give competitors access to its "tap to pay" iPhone payment system. The move resolves an antitrust dispute while avoiding a potentially large fine for Apple. The European Commission has approved Apple's proposal to enable third-party mobile wallet providers access to its contactless payment capability.
The move comes after regulators accused Apple of abusing its dominant position by restricting access to its mobile payment technology.
Apple responded to the allegations by proposing in January to grant third-party mobile wallet and payment service providers access to the contactless payment function in its iOS operating system. Following testing and feedback, the European Commission, the EU's executive arm and chief antitrust enforcer, approved these promises and will make them legally obligatory.
Margrethe Vestager, the commission's executive vice-president for competition policy, claimed that these promises result in significant improvements to Apple's operations in Europe, benefiting both competitors and customers. This judgement concludes the commission's examination into Apple Pay.
Competition authorities on both sides of the Atlantic have been investigating Apple's payment system. In March, the US Justice Department filed a lawsuit accusing the business of establishing an illegal smartphone monopoly, including charges of blocking access to contactless payment for third-party digital wallets.
The EU's adoption of Apple's proposal means additional choices for European consumers. iPhone users will now be able to establish a default wallet of their choice, while mobile wallet developers will be able to access critical iPhone authentication features like Face ID. This measure gives mobile wallet companies the opportunity to compete with Apple Pay, potentially saving banks and consumers money.
Analysts believe that corporations using their own wallets rather than relying on Apple as an intermediary might result in huge financial incentives and savings for consumers. Apple presently charges banks 0.15% for every credit card transaction done using Apple Pay.
The EU-mandated modifications will require Apple to open its payment system in all 27 EU nations, as well as Iceland, Norway, and Liechtenstein, by July 25. These promises will be in place for a decade and will be overseen by a trustee.
In reaction to the EU's ruling, Apple announced that it will allow developers in the European Economic Area to enable NFC contactless payments and transactions for a variety of applications, such as vehicle keys, corporate badges, hotel keys, and concert tickets.
Breaches of EU competition law may result in fines of up to 10% of a company's annual global revenue. In Apple's case, this may have totaled tens of billions of euros.
The European Union has accepted Apple's commitment to allow competitors access to its "tap to pay" iPhone payment system.
The move resolves an antitrust case and avoids a potentially hefty fine for Apple.
Apple's proposal to grant third-party mobile wallet providers access to its contactless payment function has been deemed satisfactory by the European Commission.
Source: AP NEWS