Apple has reached an agreement with the European Union regarding the operation of Apple Pay, resolving a lengthy competition investigation. During a press conference on Thursday, Margrethe Vestager, the Commissioner for Competition at the EU, unveiled the latest development.
Apple must make changes by July 25 to enable developers of competing mobile wallets to offer contactless payments using NFC technology, allowing their users to make “tap and go” payments. Users will have convenient access to important iOS features, including the ability to quickly launch apps with a double click and secure authentication options like Face ID, Touch ID, and passcodes.
In addition, Apple is now allowing users to designate a third-party wallet app as their preferred choice instead of relying solely on Apple Wallet. 
In June 2020, the competition division of the bloc initiated a formal investigation into Apple Pay, which is Apple’s mobile payment and mobile wallet technology. This action was taken in response to several complaints received. At first, the investigation focused on examining Apple Pay in its entirety. Eventually, the case became more focused on the utilization of Apple’s technology for contactless payments.
Presenting initial findings in May 2022, the EU’s Commission revealed that Apple had engaged in anti-competitive behavior by preventing competitors from offering NFC-enabled contactless payments on the iPhone. This action hindered the development of rival mobile wallets and created an unfair advantage for Apple Pay.
The EU raised concerns about Apple’s limitations on competitors in developing wallet apps that can connect with NFC payment terminals, similar to Apple Pay. The restriction on enabling Apple’s contactless payment technology is believed to have unfairly limited its market share. In order to foster competition, the EU has expressed its desire for Apple to grant complete access to NFC, enabling rival companies to create alternative wallets.
Apple has been given the opportunity to provide a response to the European Union’s Statement of Objections issued in May 2022. In January 2024, a significant milestone was reached as they proposed adjustments with the intention of resolving the case. The proposal provides an opportunity for third-party developers of mobile wallet and payment services to have enhanced access to NFC functionality on iOS devices. This access is available through a set of APIs, without the need to utilize Apple’s payment or wallet technology, and at no cost.
The offer would continue to prevent competitors from accessing the secure element, a specialized chip on Apple devices that enhances the security of transactions made with Apple Pay. However, Apple has stated that it will offer “equivalent access” to NFC components using a feature called “Host Card Emulation (HCE) mode.”. According to the information provided, third-party wallets can securely store payment credentials and conduct NFC transactions without needing to access the secure element.
Apple also made commitments to enhance the user experience by offering third parties additional features and functionality. These included the defaulting of preferred payment apps and access to authentication features like Face ID, their advanced biometric authentication technology. In addition, it made a commitment to use FRAND (fair, reasonable, and non-discriminatory) terms when determining whether or not to provide access to NFC.
More dedicated promises from Apple Pay
On Thursday, Vestager announced that the Commission had approved Apple’s offer following their request for certain enhancements.
Excluding competitors from the market may have hindered innovation. The decrease in options and creativity has negative consequences. This practice is detrimental to consumers and is in violation of EU competition regulations. Apple provided a series of commitments earlier this year in response to these concerns,” she stated.
During the past month, we conducted thorough testing on a package and gathered valuable feedback to determine the effectiveness of the remedies in addressing our concerns. The issue generated a great deal of interest. We received feedback from numerous banks, app developers, card issuers, and financial associations. We thoroughly examined those comments and requested that Apple enhance their commitments. Apple has now provided enhanced solutions, and as a result, we find ourselves in the present, with these solutions being legally enforceable for Apple.
The Commission’s press release provides all the information about how Apple has improved its January offer based on industry feedback:
- These improvements include removing the requirement for developers to have a license as a Payment Service Provider (PSP) or a binding agreement with a PSP to access the NFC input.
- Adapting the HCE architecture to meet the ever-changing industry standards embraced by Apple Pay
- In addition to expediting the resolution of disputes, among other measures, deadlines will be shortened.
With the EU’s recent opening of the Apple Pay antitrust case, there has been an update to the competition rulebook in the bloc. The aim is to enhance the competitiveness of digital markets by imposing upfront obligations on major platforms, such as Apple’s iOS. This ensures that tech giants cannot hinder competitors from accessing crucial infrastructure they control. EU lawmakers are pushing for the Digital Markets Act (DMA) to expedite the process of rebalancing digital dominance and reinstating competition in tipped markets.
Following the EU’s announcement of consulting with industry stakeholders on Apple’s Apple Pay offer, the company has indicated that the proposed changes align with DMA requirements.
Vestager remarked that Apple’s commitments regarding Apple Pay, which the EU has accepted, go beyond what the DMA deems necessary. “For example, they incorporate monitoring and dispute resolution mechanisms,” she pointed out, emphasizing that antitrust enforcement is closely linked to the DMA.
Apple’s ability to restrict mobile wallets from entering the market through its control over the iPhone ecosystem has been eliminated. Both wallet developers and consumers will reap the rewards of these changes, fostering innovation and providing more options, all while maintaining the utmost security for payments.
Apple is obligated to adhere to these commitments for a period of 10 years. Not following these rules may result in severe consequences.
Today’s decision solidifies the fact that Apple’s commitments are now legally enforceable. According to an EU spokesperson, Apple could face severe consequences if it fails to fulfill its commitments. The Commission has the authority to impose a fine of up to 10% of Apple’s total annual turnover or a daily penalty payment of 5% of its daily turnover for each day of non-compliance without needing to prove any violation of EU antitrust rules.
When asked for a comment, a spokesperson from Apple responded with the following statement: “Apple is now offering developers in the European Economic Area the ability to incorporate NFC contactless payments and transactions for various purposes, such as car keys, transit passes, corporate badges, home keys, hotel keys, loyalty programs, and event tickets, directly within their iOS apps using host card emulation-based APIs.” Apple Pay and Apple Wallet will remain accessible in the EEA for users and developers, ensuring a convenient, safe, and confidential payment method, along with effortless presentation of passes from Apple Wallet.
