European Union officials have formally announced an antitrust investigation into Apple, citing anti-competitive practices with respect to the company’s Apple Wallet and Apple Pay apps and services.
NFC technology is at the crux of the issue. As laid out by the European Commission’s antitrust enforcement officer, Margrethe Vestager, the EU’s accusation alleges that Apple has blocked third party access to the wireless communication technology that enables iPhone and Apple Watch users to conveniently make purchases by tapping their device at an NFC-compatible Point of Sale Terminal.
In practice, this has meant that third party apps, such as a banking app, can’t be outfitted with the same functionality, making it more difficult for them to compete with Apple’s own platforms.
“Mobile payments play a rapidly growing role in our digital economy,” Vestager explained in a statement announcing the investigation. “We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices.”
This isn’t the first time that Apple has faced this same criticism. Years ago, when the tech giant was first rolling out its Apple Pay mobile payments system around the world, Apple encountered some resistance from domestic banks that took issue with what they characterized as a threatening and unfairly advantaged rival. In Australia, multiple banks banded together to negotiate with Apple as a block in an effort to pressure Apple to grant them access to its devices’ NFC technology.
Ironically, that cartel was ultimately broken up by Australia’s own competition regulator, which determined that allowing the banks to team up against Apple was itself anti-competitive.
Apple Pay has continued its ascent since then, reaching additional markets and being interwoven into additional payments infrastructure such as fare payment on public transit.
Perhaps more consequentially, recent months have seen the emergence of Apple’s mobile ID platform enabling the use of virtual IDs on iPhones and Apple Watches – a project overseen by Apple Pay and Apple Wallet VP Jennifer Bailey. The new platform points to Apple’s overarching effort to make its own mobile platform into a payments and identity hub for Apple users, who may ultimately feel comfortable leaving their physical wallets behind when heading out to shop or travel.