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It all starts in 2022: at the time, the European Commission accused Apple of a monopoly on iPhone in contactless payments with the Apple Pay system. More precisely, the Commission accused the Cupertino firm of abusing “its dominant position in the mobile wallet markets” , by preventing the arrival of competitors like Google Pay and Samsung Pay on iPhone.
After two years of legal battle, Apple finally gave in and outlined a solution. After authorizing the emergence of competing application stores on iPhone in Europe, the firm appears to be offering the same type of solution for contactless payments. From what we understand at this stage, an application downloaded from the App Store, or a website will be able to take advantage of the NFC functionalities of iPhones without constraints.
Apple is ordered to open the Apple Pay payment system
The obligation is part of the DMA text in force in Europe – which has already forced Apple's hand on other aspects of its ecosystem. To defend its position, Apple argued, as with the question of alternative application stores and sideloading on iPhone, that opening the system to competition would necessarily introduce a security risk – since the firm could no longer completely prevent payments without potentially corrupt contacts.
However, from what we understand, the firm will have to validate in advance the applications and services that can use the system, which should limit the risks. A priori these alternative payment systems will not be available outside of Europe, but this remains to be confirmed. In May, the Commission should examine the firm's proposal and validate it, subject to a few small modifications to better comply with the texts in force.
The firm doesn't really have a choice if it doesn't want to cut itself off from one of the most lucrative markets in the world, even though its position in other key markets as China is no longer completely in good shape. The first three months of 2024 saw iPhone market shares fall from 20% to 15.4% in the country, a plunge of 19.1%.
However, for its part, the European Commission does not hesitate to take action if necessary. As our colleagues at BFMTV recall, the firm was fined 1.8 billion euros on March 4, 2023 for abuse of a dominant position in online music services (by pushing its Apple Music service in its products). A first rather heavy sanction which seems to lead the firm to increased respect for the European approach to digital technology.
- The European Commission is preparing to validate a proposal from Apple regarding contactless payment on iPhone.
- The firm must in fact absolutely allow third-party developers to use the NFC APIs of these devices more freely to offer competing payment methods.
- If the firm did not comply, it would expose itself to a new serious offense for abuse of a dominant position.
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