Brussels – The European Commission mandates Apple to allow third-party access to NFC technology, ensuring competition in contactless payments and avoiding further antitrust scrutiny.
The European Commission legally restrained Apple to obligations, addressing previous competition situations over its refusal to give rivals access to NFC technology for contactless payments. Since the EU Commission determined to legally bind Apple in these duties, which would open this ecosystem to competitors, the firm is avoiding further antitrust scrutiny in this field for now.Â
How Apple’s NFC Commitments Impacting Competitors?
The case concerns Near-Field Communication (NFC), the technology employed for most smartphone payments. Apple machines use Apple Pay for NFC payments by default. This provides Apple with a predominant position in the mobile wallet market on iOS. The firm has not allowed third-party developers to access NFC components, which the EU Commission discovered to be an abuse of its dominant function under the DMA.
What Are Apple’s New NFC Obligations in Europe?
The EU executive conveyed Apple’s commitments to manage the competition concerns in January. If the company fails to observe the now-legally binding commitments, the Commission may assess a fine of up to 10% of its annual turnover or a daily penalty of 5% of its daily turnover for non-compliance.
The EU Commission expressed Apple’s updated responsibilities include authorising third-party wallet providers free access to NFC technology on iOS gadgets via Host Card Emulation (HCE), which securely stores payment credentials for transactions. “Apple Pay and Apple Wallet will continue to be available in the European Economic Area (EEA) for users and developers,” an Apple representative said.
What Feedback Influenced Apple’s NFC Commitment Changes?
Between 19 January and 19 February, the EU Commission experimented with Apple’s commitments and conferred with third parties, seeking feedback based on which the company revised its previous commitments, the EU executive said. “Many banks, app developers, card issuers, and financial associations gave us their feedback,” Margrethe Vestager, executive vice president and commissioner for competition at the Commission, stated.
The tech giant is dedicated to a fair and transparent process for granting NFC access, permitting users to easily set HCE payment apps as defaults and operate related features like Field Detect and authentication tools. Apple also developed a system to oversee adherence to its NFC access commitments across the EEA and resolve any disputes.
The company widened NFC payment options to include certified terminals, allowed developers to integrate NFC operations freely without licenses, facilitated setting default payment apps, and improved dispute resolution with improved monitoring.
Why Is Apple Designated a Gatekeeper by the EU?
Because of its critical position, Apple is designated as a gatekeeper under the EU’s digital competition regulation, the Digital Markets Act (DMA). The DMA, among other things, requires that gatekeepers permit interoperability with their hardware and software, including NFC technology, the determination also addresses these practices, Vestager said. She stated that monitoring and dispute resolution mechanisms, which Apple is also dedicated to, are, however, “more than what is required by the DMA.”
