- Apple has offered to expand its NFC input availability to third parties in the EEA
- Formerly only Apple’s own Apple Pay service could access the iPhone chip required for contactless payments
iOS users in the European Economic Area will be able to use third-party alternatives to Apple Pay and Apple Wallet, as the tech giant has agreed to enable NFC input access free of charge.
The legally binding commitment has been agreed between Apple and the European Commission under EU antitrust rules.
Apple’s prior refusal to allow Apple Pay rivals to use the NFC chip built into every iPhone blocked third-party wallet providers, which according to the Commission, might have breached Article 102 of the Treaty on the Functioning of the European Union; this article prohibits “abuse of a dominant position”, which Apple was under investigation over.
Now, the tech giant has submitted to the Commission and offered to open up its tap-and-go tech before the investigation goes any deeper – an offer that the Commission has accepted, bringing the matter to a close and ending Apple’s Apple Pay dominance.
Arrangements and amendments
To address competition concerns around contactless payments, Apple first offered a series of commitments including third-party access to NFC inputs in Host Card Emulation mode, a “fair” and “objective” set of eligibility criteria for which developers should gain access to said technology, and an independent review of cases where Apple would refuse access.
The Commission market-tested these pledges and returned to Apple with the results, leading to certain amendments from the iPhone maker.
Namely, Apple offered to extend the possibility for Host Card Emulation payment apps at other industry-certified terminals. Additionally they will remove the eligibility requirement for a Payment Service Provider licence or a binding agreement with one. And finally they will allow prompts from developers that redirect users to a default NFC settings page.
Shortening deadlines for resolving disputes, allowing pre-built payment apps for third-party wallets, and updating Host Card Emulation architecture in compliance with changing industry standards, were also offered in Apple’s updated commitment.
Now agreed by the commission, these pledges will pass into a legally binding agreement that will remain in force for 10 years and apply throughout the EEA, meaning that such third-party payments will be permitted across the EU, Iceland, Liechtenstein, and Norway.Apple’s behaviour will be monitored by a trustee appointed by the iOS maker, who will report to the Commission.
What are Apple giving up?
In short it’s hard to imagine Apple having any kind of leg to stand on in this arguement. Literally blocking any other service from using their NFC chip gave Apple Pay a monopoly in direct controvention of the EU law. Apple giving up this hold is welcome, expected and a fight it could never win.
However, given that Apple Pay works so well and many iPhone users have already attached credit cards to it, it’s debatable how many users will jump at the chance to use new services and go through another sign up process to faciltate contactless payments.
Apple may simply be rolling over in a battle that in reality it’s already won.
However the same can’t be said in regards to their separate EU case that just rumbles on, as the DMA is all set to take a bite at Apple for its supposed half-hearted adherence to it’s DMA regulations.
