It’s official. The European Union (EU) has given Apple the green light to open up its mobile payments system and let competitors use the iPhone’s NFC technology, finally wrapping up a long investigation into the matter.
Apple has dodged a hefty fine from the EU by agreeing to allow third-party apps to use tap-to-pay through iPhones’ NFC chips. Cupertino has given its word to let third-party bank apps access NFC chips for tap-to-pay, previously exclusive to Apple Pay in the EU.
“Today, the Commission has decided to accept commitments offered by Apple. These commitments address our preliminary concerns that Apple may have illegally restricted competition for mobile wallets on iPhones,” says Margrethe Vestager, Executive VP, of the EU competition policy. “NFC technology was not developed by Apple. It is a standardized technology. It is made available for free.”
There’s Always a Backstory
In 2022, the EU charged Apple with anti-competitive behavior, accusing the company of restricting access to its NFC payment technology. Apple faced a “Statement of Objections” for allegedly violating Article 102 of the TFEU by limiting third-party developers’ access to NFC, which was exclusively available through Apple Pay on iOS devices. This move was seen as hindering competition in the mobile payments sector within the EU.
Fast forward to today, Apple has until July 25 to make the changes it has promised. If it doesn’t follow through, it could face fines. This deal will be in effect for 10 years. By agreeing to this, Apple avoids a massive fine from the EU. The potential penalty could have been as high as 10% of their global revenue, given Apple’s reported revenue of $383 billion in 2023, that could have meant around $40 billion in fines.