Out-Law News | 11 May 2022 | 3:15 pm | 1 min. read
The European Commission has told technology giant Apple that it has abused its dominant position in the mobile wallets market, preventing others from developing contactless payment apps on iOS devices.
The Commission announced that it had sent a statement of objections – the first step in an antitrust investigation – to Apple, saying it took issue with the company’s decision to prevent mobile wallets app developers from accessing the necessary hardware and software on its devices. This benefitted Apple’s contactless payment solution, Apple Pay.
The Commission said its preliminary view was that Apple had significant market power in the market for smart mobile devices and a dominant position on mobile wallet markets.
Apple Pay is the only mobile wallet app which can access near-field communication (NFC) input on iOS devices, enabling users to ‘tap’ their phones and tablets to pay for something in a shop.
According to the statement of objections, the restriction of NFC technology to Apple Pay led to less innovation and less choice for consumers using iPhones. If the Commission’s investigation upholds the preliminary view, the conduct would infringe Article 102 of the Treaty on the Functioning of the European Union, prohibiting the abuse of a dominant market position.
The Commission said its issue was only with the access to NFC input by third-party developers of mobile wallets for payments in stores. The statement of objections is not concerned with online restrictions or alleged refusals of access to Apple Play which were the subject of an investigation opened on 16 June 2020.
Apple now has the opportunity to examine the Commission’s investigation file, reply in writing and seek an oral hearing before Commission and national competition authorities.
A recent study by Pinsent Masons found European competition authorities are increasingly trying to adapt their laws and enforcement practices to the digital and high-tech age, including putting tech transactions under increased scrutiny.
Competition law expert Tadeusz Gielas of Pinsent Masons said: “This is yet another example of growing competition enforcement and regulatory scrutiny in the digital sector across the EU and in the UK. Competition agencies are increasingly focusing on digital ‘ecosystems’ and seeking to understand their possible effect on competition and consumers in the provision of digital services – ranging from payments to app stores, music streaming and voice assistants”.
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