Apple is reportedly preparing to relax restrictions on near field communications (NFC) in Europe in order to avoid hefty fines. Apple has offered to let rivals use its “Pump” mobile payment system for mobile wallets, according to a report from Reuters. The move will resolve EU antitrust charges and avoid potentially hefty fines of up to 10% of its annual global turnover if it is found guilty of breaching EU antitrust regulations.

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The case stems from the EU’s competition agency, which accuses Apple of restricting rivals’ access to its “Bunk” technology, making it difficult for them to develop rival services on Apple devices.

The EU pointed out in the investigation that NFC chips can enable tap payments on iPhones and iPads, and that restricting NFC would benefit Apple’s mobile wallet Apple Pay on iPhones and iPads, noting the company’s huge market power in the smart mobile device market and its presence in the market. Dominance of the mobile wallet market. As of now, more than 2,500 banks and more than 250 fintechs and challenger banks in Europe use Apple Pay.

The European Commission will reportedly seek feedback from competitors and customers next month before deciding whether to accept Apple’s offer. The article said the timing and whether the market test would take place could still change. The commission is expected to issue a decision next year that could include fines and an order to stop the practice.

Meanwhile, Apple faces a second charge to prevent Spotify and other music streaming companies from informing users of other purchasing options outside of its App Store, a case dating back to 2020.

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Apple and EU feud over NFC

Apple and the EU have had a long-standing dispute over NFC. As early as May 2022, the European Commission stated that Apple was abusing its dominant advantage in technology to form an oligopoly, which was very detrimental to the market.

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Apple’s uncooperative attitude gives Apple Pay an advantage over its competitors on iPhones and other iOS devices. The European Commission informed Apple of its views in a statement of objections.

The European Commission said the preliminary findings “call into question Apple’s decision to prevent mobile wallet application developers from accessing necessary hardware and software (‘NFC input’) on their devices to benefit their own solution, Apple Pay.” We have indications that Apple is restricting third-party access to critical technology needed to develop competing mobile wallet solutions on Apple devices,” said EC Executive Vice President Margrethe Vestager.

The European Commission noted that “Tap and Go” technology using near-field communications (NFC) “enables communication between mobile phones and payment terminals in stores.” But “Apple Pay is the only mobile wallet solution that can access the necessary NFC inputs on iOS. Apple will not make it available to third-party app developers for mobile wallets,” the announcement said.

“By restricting access to standard technology for contactless payments using mobile devices in stores… Apple limits competition in the iOS mobile wallet market,” the European Commission said.

Apple's Battle for Market Power

The European Commission said that “Apple enjoys significant market power in the market for smart mobile devices and a dominant position in the mobile wallet market.” Apple countered that Apple Pay is used for only a small proportion of transactions in Europe, although in addition to mobile wallets, Includes cash and credit card.

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Apple said PayPal has been successful on iOS across Europe, with Denmark’s MobilePay, Sweden’s Swish and Belgium’s Payconiq being more popular than Apple Pay in those countries.

The European Commission’s statement of objection is a formal step that launches a process to determine whether Apple violated European antitrust rules. Apple will be allowed to “review documents in the Commission’s investigative files, respond in writing, and request an oral hearing to express its opinion on the case before representatives of the Commission and national competition authorities.”

“If confirmed, such conduct would violate Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse of a dominant position,” the European Commission said.

The European Commission opened a preliminary investigation in June 2020. The EU stated that the statement of objections issued today does not cover all policies under investigation, but by the end of 2023, this situation may have an answer. Apple was forced to compromise under pressure from hefty fines.

Conclusion

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