The European Commission has accepted Apple’s commitment to open up its phone-based checkout payment system to third parties. These commitments address the Commission’s competition concerns related to Apple’s refusal to grant its rivals access to a standard technology used for contactless payments with iPhones in stores, known as ‘Near-Field-Communication (NFC)’ or ‘tap and go. ‘
Apple’s mobile wallet, Apple Pay, allows iPhone users to pay in stores and online. The Commission found that Apple has significant market power in the smart mobile devices market and a dominant position in the in-store mobile wallet market on its operating system, iOS. Apple is the only company that can access the NFC hardware and iOS software for in-store payments, and third-party mobile wallet developers are not allowed to do so.
Thus, the Commission concluded that Apple abused its dominant position by not allowing competing mobile wallet developers access to the NFC input on iOS, limiting innovation and choice for iPhone users. This behaviour may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant position.
“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,” Margrethe Vestager, Executive Vice-President in charge of competition policy, said.
“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,” Vestager added.
Apple’s commitments
In response to the Commission’s concerns, Apple has proposed allowing third-party wallet providers to access the NFC input on iOS devices for free. This access will be granted through Host Card Emulation (HCE) mode, enabling secure storage of payment credentials and transactions using NFC. Apple will establish fair procedures for granting NFC access to third-party mobile wallet app developers and ensure access to relevant functionalities such as Field Detect and Double-click. These commitments will apply to all third-party mobile app developers in the European Economic Area (EEA) and all iOS users with an Apple ID registered in the EEA, including those travelling temporarily outside the EEA.
Between January 19, 2024, and February 19, 2024, the Commission market-tested Apple’s commitments and consulted interested parties to address competition concerns. Apple made several changes, including allowing payments with HCE apps at industry-certified terminals, removing restrictions for HCE developers, and providing additional procedural guarantees for the monitoring trustee.
The Commission found that Apple’s commitments address concerns about restricting third-party mobile wallet access for EEA iOS users. These commitments will be legally binding, monitored by a trustee, and in effect for ten years throughout the EEA. They do not affect Apple’s other regulatory obligations.
