Sunday, July 21, 2024

EU and Apple settle long-running ‘tap-and-go’ antitrust probe

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Brussels has accepted measures from Apple that give the iPhone maker’s rivals access to its contactless payments technology system and ensures the company avoids a hefty fine at the end of a protracted antitrust probe.

The US tech giant, as a concession to EU demands, will allow developers to enable its “tap-and-go” technology or near-field communication (NFC) to use Apple Pay and Apple Wallet as “an easy, secure and private way to pay, as well as present passes”, it said on Thursday.

Apple will thus avoid a penalty from Brussels of as much as $40bn and a formal accusation that it has broken EU law. The move marks a brief truce between the two after a number of antitrust accusations from European regulators.

“Today’s decision makes Apple’s commitments binding,” said Margrethe Vestager, the executive in charge of enforcing EU competition rules, on Thursday. “It opens up competition in this crucial sector, by preventing Apple from excluding other mobile wallets from the iPhone’s ecosystem.”

The tech group’s rivals will be able to “effectively compete” with Apple Pay for mobile payments with the iPhone in shops, she added, giving consumers a “wider range of safe and innovative mobile wallets to choose from”.

Hundreds of millions of iPhones use Apple Pay and the end of this long-running probe comes at a time when regulators in the EU and the US are stepping up their scrutiny of the company’s corporate practices.

Brussels accused Apple in 2022, after two years of investigation, of breaking competition law by blocking rivals’ access to its technology to favour its own payment system.

Officials have been testing concessions by Apple since January that include giving developers free access to its NFC technology on iOS devices with no need to use Apple Wallet or Apple Pay. The Financial Times last month reported on an imminent settlement of the case.

Sanctions from the EU for anti-competitive practices would have included a fine of up to 10 per cent of the group’s total worldwide annual turnover. In 2023 Apple’s revenues of $383bn would have meant a fine of roughly $40bn though regulators rarely impose the highest penalty and fines tend to get reduced in court after appeal. 

Apple recently became the first company to face charges under the EU’s Digital Markets Act, tough legislation aimed at improving consumer choice and opening digital markets in Europe.

It was also recently fined a record €1.8bn over anti-competitive practices related to music streaming services. Apple has taken the EU to court and appealed against the penalty. 

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