Apple has abused its dominant position in markets for mobile wallets on iOS devices, the European Commission has told the tech giant.
The preliminary view of the Commission is that by limiting access to a standard technology used for contactless payments, known as ‘near-field communication (NFC)' or ‘tap-and-go', Apple restricts competition in the mobile-wallets market on iOS.
Preventing app developers from accessing the necessary Apple hardware and software has benefitted Apple Pay, according to Margrethe Vestager (executive vice-president in charge of competition policy).
“Mobile payments play a rapidly growing role in our digital economy. It is important for the integration of European payments markets that consumers benefit from a competitive and innovative payments landscape,” she said.
“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile-wallet solutions on Apple's devices. If confirmed, such a conduct would be illegal under our competition rules.”
The objections statement says that Apple devices form a closed ecosystem, with Apple controlling every aspect of user experience, including mobile-wallet-developers' access.
The European Commission considers that Apple enjoys significant market power in the market for smart mobile devices, and a dominant position on mobile-wallet markets.
In particular, Apple Pay is the only mobile-wallet solution that may access the necessary NFC input on iOS. Apple does not make it available to third-party app developers of mobile wallets.
The standardised NFC ‘tap-and-go' payment technology is safe and seamless and is embedded on Apple devices. It enables communication with in-store payments terminals, with wide acceptance in Europe.
The Commission's preliminary Statement of Objections says that Apple's dominant position in the mobile-wallet market restricts competition, by reserving access to NFC technology to Apple Pay.
This has an exclusionary effect on competitors and leads to less innovation and choice for consumers for mobile wallets on iPhones, the Commission said.
If confirmed, this conduct would infringe Article 102 of the Antitrust Regulation (Council Regulation No 1/2003, which prohibits the abuse of a dominant market position.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules.
The addressees can examine the documents in the investigation file, reply in writing, and request an oral hearing before the Commission and national competition authorities.
There is no legal deadline for bringing an antitrust investigation to an end.