August 13, 2022

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Apple hits EU antitrust duties on mobile payment technology

Apple hits EU antitrust duties on mobile payment technology

BRUSSELS, May 2 (Reuters) – Apple Inc It faces a potentially hefty fine and may have to open up its mobile payment system to competitors after EU antitrust regulators charged the iPhone maker by restricting competitors’ access to technology used in mobile wallets.

This is the second charge in the European Union against Apple after EU regulators last year accused the company of distorting competition in the music streaming market following a complaint by Spotify. (SPOT.N). Read more

The European Commission said on Monday it had sent an indictment known as a Statement of Objections to Apple, detailing how the company abused its dominant position in the mobile wallet markets on iOS devices.

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The commission said Apple’s anti-competitive practices date back to 2015 when Apple Pay was launched.

“We have indications that Apple has restricted third party access to key technology needed to develop competing mobile wallet solutions on Apple devices,” EU Antitrust Chief Margrethe Vestager said in a statement.

“In stating our objections, we tentatively found that Apple may have restricted competition, in favor of its own Apple Pay solution,” she said.

Apple, which could face a fine of up to 10% of its global sales or $36.6 billion based on its revenue last year, although EU sanctions rarely reach the maximum, said it would continue to deal with the Commission.

“Apple Pay is just one of many options available to European consumers to make payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security,” the company said in a statement.

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Frankfurt-listed Apple shares tumbled after the news and were down 0.7% at 1216 GMT.

Apple Pay is used by more than 2,500 banks in Europe and over 250 fintechs and competing banks. The NFC chip enables instant payments on iPhone and iPad devices.

Vestager rejected the security firm’s argument.

“Our investigation to date has revealed no evidence to suggest such a high security risk. On the contrary, the evidence in our file indicates that Apple’s behavior cannot be justified by security concerns,” she said at a press conference.

Apple can request a closed hearing to defend its case and also send a written response before the panel issues a decision that could take a year or longer.

The European Union is set to implement new technology rules next year called the Digital Markets Act that will force Apple to open up its closed ecosystem or face fines of up to 10% of its global sales.

The Commission’s decision to send a statement of its objections to Apple confirmed the Reuters story in October last year. Read more

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Fu Yun Che reports. Editing by Philip Blinkinsop and Jane Merriman

Our criteria: Thomson Reuters Trust Principles.