In an effort to avoid potential European Union (EU) antitrust fines, Apple Inc. has decided to open up its tap-to-pay technology on iPhones to rivals. The EU has accused the US tech giant of abusing its market power by restricting access to its closely guarded payments chip. To address these concerns, Apple has proposed a 10-year offer that would give other "mobile wallet" providers access to its payments chip on Apple devices.
The European Commission, based in Brussels, announced on Friday that it is seeking feedback from rivals on the proposed deal. If the feedback concludes that the offer resolves the EU's concerns, the concessions would become legally binding. Apple would then be required to honor its pledge or face a potential fine of up to 10% of its worldwide revenue.
Apple's digital wallet solution, Apple Pay, allows users to store virtual debit and credit cards on their iPhones, along with ticket bookings. The near-field communication (NFC) chip in iPhones enables tap-to-pay transactions at cash registers. However, Apple has imposed strict restrictions on access to the NFC antenna, which has been criticized by rival payment providers for violating EU competition rules.
Under Apple's proposed offer, third-party developers would have the option to enable NFC contactless payments from within their iOS apps. A spokesperson for Apple stated that Apple Pay will still be widely available. Despite this proposition, Apple's antitrust conflicts with the EU are far from over.
In addition to the antitrust investigation, Apple could potentially face a large fine and a ban on its App Store rules, allegedly used to hinder music-streaming rivals. This is part of the EU's ongoing crackdown on Big Tech, led by competition commissioner Margrethe Vestager. Apple is also entangled in a legal battle over a €13 billion ($14.2 billion) tax bill, which the EU claims is the result of unfair Irish tax breaks.
While Apple's offer to open up its tap-to-pay technology to rivals is a significant step toward resolving the EU's investigation, the tech giant still faces significant hurdles on multiple fronts. The outcome of this ongoing conflict will have significant implications not only for Apple but for the wider tech industry and competition regulations within the EU.