- EU previously found that Apple enjoyed a dominant position by restricting access to NFC
- The agreement is for 10 years as company voids billion dollar fine
The EU on July 11 approved Apple’s offer to allow rivals access to the iPhone’s ability to tap-to-pay in Europe.
“Apple has committed to allow rivals to access the ‘tap and go’ technology of iPhones. Today’s decision makes Apple’s commitments binding,” EU competition chief Margrethe Vestager said in a statement announcing the agreement.
The settlement settles an investigation that started in April 2022 to stave off a potential hefty fine for the Silicon Valley-based company that could have been as much as 10 percent of its global annual turnover—given Apple’s reported revenue of $383 billion in 2023, the fine could have amounted to approximately $40 billion.
NFC Issue
The EU previously found that Apple enjoyed a dominant position by restricting access to “tap-as-you-go” chips or near-field communication (NFC), which allows devices to interconnect within a very short range, to favor its own system.
Companies will now have access to the standard technology behind contactless payments to offer alternative tap-to-pay tools to iPhone users in the European Economic Area (EEA), which includes the EU as well as Iceland, Liechtenstein and Norway.
“From now on, competitors will be able to effectively compete with Apple Pay for mobile payments with the iPhone in shops. So consumers will have a wider range of safe and innovative mobile wallets to choose from,” Vestager said.
Agreement Details
Details of the deal include only customers with an Apple ID registered in the EEA would be able to make use of these outside apps, changes must remain in force for 10 years and a “monitoring trustee” must be chosen by Apple to report to the commission during that period on their implementation.
The agreement additional calls for:
- NFC access for developers to pre-build payment apps for third party mobile wallet providers.
- enable developers to prompt users to easily set up their default payment appand redirect users to the default NFC settings page, enabling defaulting with only a few clicks.
- Extend the possibility to initiate payments with payment apps at other industry-certified terminals, such as merchant phones or devices used as terminal (so called SoftPOS), if this is enabled.
- Updates to complywith evolving industry standards used by Apple Pay, and to continue to update standards even if they are no longer implemented by Apple Pay, under certain conditions.
Apple officials said the agreement will provide developers in the European Economic Area with an option to enable NFC contactless payments and contactless transactions for car keys, closed loop transit, corporate badges, home keys, hotel keys, merchant loyalty/rewards, and event tickets from within their iOS apps using Host Card Emulation based APIs.
“Apple Pay and Apple Wallet will continue to be available in the EEA for users and developers, and will continue to provide an easy, secure and private way to pay, as well as present passes seamlessly from Apple Wallet,” according to a statement from the company.
Related stories:
- Apple Reportedly Closing in on NFC Deal with EU Regulators
- Apple’s Close to EU Deal to Open NFC Technology: Report