Apple Opens Tap-and-Go Payments to Rivals Amid EU Scrutiny

Apple will open its tap-and-go mobile payments system to competitors, the EU antitrust regulator announced. This decision comes even as EU’s antitrust chief, Margrethe Vestager, noted that Apple has yet to fully comply with new landmark tech regulations.

Compliance with the Digital Markets Act

Apple is currently facing three investigations under the Digital Markets Act (DMA). This legislation mandates that major tech companies create a level playing field for competitors and offer users more choices. Last month, Vestager highlighted that Apple’s App Store rules were in violation of the DMA and initiated an investigation into Apple’s new contractual terms for app developers and rival app stores. Despite these findings, Vestager stated that Apple has not yet taken steps to align its business practices with the DMA.

“What I can say so far is that we have not seen a change in behaviour on Apple’s side when it comes to our preliminary findings,” Vestager said at a press conference. “I would have hoped so because I think it will be beneficial for consumers and customers and of course respectful to the legislator to discuss in depth what would be expected from gatekeepers.”

Opening Tap-and-Go Payments

Separately, Vestager accepted Apple’s proposal to open its tap-and-go mobile payments system to rivals, concluding a four-year investigation that could have resulted in substantial fines. The European Commission, which serves as the EU antitrust authority, confirmed that Apple’s offer will be valid for 10 years. Currently, over 3,000 banks and issuers in Europe offer Apple Pay.

“From now on, Apple can no longer use its control over the iPhone ecosystem to keep other mobile wallets out of the market,” Vestager stated.

Apple’s tap-and-go technology, known as near-field communication (NFC), facilitates contactless payments with mobile wallets. With this change, developers will gain access to Apple’s NFC, enabling them to build payment apps for rival mobile wallet providers. Apple’s offer will also allow European developers to enable tap-and-go payments for car keys, closed-loop transit, corporate badges, home keys, hotel keys, merchant loyalty/rewards, and event tickets within their iOS apps.

Industry Reactions

Norwegian mobile payment app Vipps MobilePay, which had previously complained about Apple Pay, welcomed the new concessions. “It gives us the opportunity to compete on equal terms with Apple and other providers,” a spokesperson for the app said.

Apple’s Antitrust Challenges

In March, Apple was fined 1.84 billion euros, marking its first EU antitrust penalty. The fine was imposed for limiting competition from Spotify and other music streaming services through restrictions on its App Store.

In related news, Vestager also commented on Microsoft’s recent deal with cloud services organization CISPE to resolve an antitrust complaint and avoid an EU investigation. “I think it’s a promising outcome,” she remarked.

With these developments, Apple is under significant pressure to adapt its business practices and foster a more competitive landscape in the tech industry.