Apple has successfully averted a substantial fine from the European Union by committing to open up its Near Field Communication (NFC) technology to third-party mobile payment apps.
The European Commission (EC) had initiated an investigation into Apple’s restrictive practices concerning mobile payments, but it has accepted Apple’s proposals to allow broader access to iPhone’s NFC chips.
Previously, NFC functionality on iPhones was exclusively available through Apple Pay, limiting the ability of other mobile wallet developers to compete. This led the EC to conclude that Apple had abused its dominant position within the iOS ecosystem by restricting access to this crucial technology.
Apple’s commitments, now accepted by the EC, include several key provisions. Third-party bank apps will gain access to NFC for tap-to-pay functionality, leveling the playing field for mobile payments.
Additionally, Apple has agreed to implement a fair, objective, transparent, and non-discriminatory procedure for granting NFC access to developers. Users will also be able to set a default app for mobile payments, offering an alternative to Apple Pay.
To ensure the security of transactions, third-party mobile payments will be able to use iPhone’s passcode, Touch ID, or Face ID. Furthermore, Apple will establish a monitoring mechanism and a separate dispute settlement system, allowing for independent reviews of decisions that restrict NFC access.
These commitments are specifically tailored for third-party mobile app developers established in the European Economic Area (EEA) and iOS users with Apple IDs registered in the EEA. The functionality will remain available temporarily for users traveling outside the EEA.
These terms are legally binding for Apple and will remain in effect for ten years. An independent trustee, appointed by Apple and reporting to the EC, will oversee the implementation.
Margrethe Vestager, the European Commission Vice President in charge of competition policy, emphasized the significance of this decision, stating, “It is safe and convenient to pay with your phone. Apple has committed to allow rivals to access the ‘tap and go’ technology of iPhones.
Today’s decision makes Apple’s commitments binding. It opens up competition in this crucial sector, by preventing Apple from excluding other mobile wallets from the iPhone’s ecosystem. From now on, competitors will be able to effectively compete with Apple Pay for mobile payments with the iPhone in shops. So consumers will have a wider range of safe and innovative mobile wallets to choose from.”
This move is expected to foster greater competition in the mobile payments sector, providing consumers with a broader array of choices and innovative solutions.