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Apple (AAPL) Faces EU Antitrust Action on Apple Pay

'Exclusionary effect' brings 'less innovation and less choice for consumers'

Apple Inc. (AAPL) is facing increased antitrust scrutiny from the European Union (EU), with its Apple Pay digital wallet being a particular target for regulators. The preliminary view of European regulators is that Apple is obstructing competition by preventing other mobile wallet app developers from accessing the necessary hardware and software on Apple devices.

EU competition commissioner Margrethe Vestager stated: "Apple has built a closed ecosystem around its devices and its operating system, iOS. And Apple controls the gates to this ecosystem, setting the rules of the game for anyone who wants to reach consumers using Apple devices. By excluding others from the game, Apple has unfairly shielded its Apple Pay wallets from competition."

Key Takeaways

  • EU regulators are pursuing antitrust probe regarding Apple Pay.
  • They claim that Apple is unfairly blocking the development of competing mobile wallets that can be used on iPhones.
  • Apple contests the allegations.

EU Issues With Apple Pay

EU regulators note that Apple Pay is far by the largest mobile wallet on the market utilizing near-field communication (NFC) technology, which uses a chip in a mobile device to communicate wirelessly with a merchant's payment terminal. They allege that Apple has refused to give other app developers access to this technology, and that this practice "has an exclusionary effect on competitors and leads to less innovation and less choice for consumers for mobile wallets on iPhones."

Apple Responds

Apple responded that Apple Pay "is only one of many options available to European consumers for making payments, and [Apple] has ensured equal access to NFC while setting industry-leading standards for privacy and security." Apple added that it "will continue to engage with the [European] Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment."

Vestager said that the EU takes security issues very seriously but can find no evidence that security risks would increase if other app developers got access. "Apple's conduct cannot be justified by security concerns," she said.

App Store Also Under Scrutiny

EU regulators are also looking into whether Apple has been violating EU antitrust laws in the market for music streaming. Specifically, they are investigating allegedly unfair rules for rival services in the Apple App Store.

Article Sources
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  1. AP News. "European Union Moves Forward in Antitrust Case Against Apple."

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