As predicted, Apple has been exonerated in the EU of the limits imposed so far on mobile payments, thereby escaping a potentially very heavy fine. The European Commission (EC), which launched an investigation into these practices, has accepted Apple’s commitments to open up access to the iPhone’s NFC chips to enable third-party apps to use tap to pay.
Apple has committed to allowing third-party bank apps access to NFC chips to enable tap to pay. Until now this has only been possible through Apple Pay, but that is changing in the EU.
The EC initially concluded that Apple had abused its dominant position on iOS by refusing to allow competing mobile wallet developers access to NFC for payments.
The EC agreed to Apple’s concessions in the case, namely allowing third-party wallet providers access to NFC, implementing a fair, objective, transparent, and non-discriminatory process and eligibility criteria for granting these developers access to NFC, and allowing users to easily set a default app for mobile payments that is not Apple’s own.
Third-party mobile payments will also be able to use passcodes, Touch ID or Face ID to secure transactions. Apple will be required to establish a monitoring mechanism and a separate dispute resolution system to allow independent review of Apple’s decisions to restrict access.
Note that all of these provisions only apply to third-party mobile app developers established in the European Economic Area (EEA) and all iOS users with an Apple ID registered in the EEA. The functionality will continue to work for them “temporarily” while traveling outside the EEA. All of these terms are legally binding on Apple, and will remain in force for ten years. The EC will monitor implementation through a trustee appointed by Apple who will report to the EC.
EC Vice-President Margrethe Vestager in charge of competition policy said:
Paying with your phone is secure and convenient. Apple has committed to give competitors access to the iPhone’s ‘tap and go’ technology. Today’s decision makes Apple’s commitments binding. It opens up competition in this important area, as it prevents Apple from excluding other mobile wallets from the iPhone ecosystem. From now on, competitors will be able to compete effectively with Apple Pay for mobile payments with the iPhone in stores. Consumers will therefore have a wider range of secure and innovative mobile wallets to choose from.
