Apple has been at the center of a regulatory debate in the European Union (EU) for years. EU antitrust regulators launched an investigation following claims by the company’s rivals that Apple hindered their access to its tap-and-go contactless payment technology.
The iPhone maker appears to have secured a significant victory in a case that could have cost Apple as much as 10% of its global annual turnover. After the company implemented mandated changes to its mobile payments platform, EU regulators signaled their intent to approve Apple’s tap-and-go-tech in May.
To secure the approval, Apple had to prove that it had given competitors access to its near-field communication (NFC) technology, which powers the tap-and-go platform. The company’s proposal grants competitors access to Apple’s NFC tech for 10 years, without any fees or obligations to use Apple Pay.
Avoiding Catastrophe
While the company is no doubt happy about its increased market penetration, Apple is likely more relieved to have avoided further penalties. The EU recently fined the company $2 billion in March after it received allegations from Spotify.
The music streaming service claimed that Apple charged an excessive 30% commission on its sales and alleged that Apple prevented Spotify and others from advertising discounted subscription rates and promotions, while also diverting users away from the Apple ecosystem.
Mounting Concerns
Apprehensions about the company’s practices haven’t been limited to the EU. The Consumer Financial Protection Bureau (CFPB) also expressed concerns about the market dominance held by Apple and Google in the mobile payments space.
Tap-to-pay technology was at the center of the CFPB’s concerns, because regulators worry mobile wallets are just another tool big tech companies use to keep consumers locked into their ecosystem.
The CFPB estimated that 130 million Americans use an iPhone at least once a month, and over 75% having Apple Pay installed. In April 2023 alone, the CFPB estimated that 55.8 million users made an Apple Pay purchase in-store. The surging popularity of the technology only amplifies concerns about Apple’s tight grip on it.
The CFPB also noted that Apple actively thwarts innovation because Apple Pay doesn’t integrate with other banking apps, or with payment apps like Venmo. Apple and Google pushed back, stating the CFPB had a vested interest in keeping tech out of banking.
While the fight between governments and big tech persists, the EU win is critical to keep Apple’s plans for its mobile wallet platform on track.