The European Union (EU) stepped up its antitrust case against Apple, accusing the company of abusing its dominant position by limiting access to technology used for contactless payments with mobile devices in stores and restricting competition in the mobile wallets market on iOS.
As a result, the Cupertino tech giant may face a hefty fine and may have to open its mobile payment system to competitors, reports Reuters.
This is the second accusation against Apple after the EU warned the company of distorting competition in the music streaming market following the complaint by Spotify.
Executive Vice-President Margrethe Vestager, in charge of competition policy, says, “Mobile payments play a rapidly growing role in our digital economy. It is important for the integration of European Payments markets that consumers benefit from a competitive and innovative payments landscape. We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices. In our Statement of Objections, we preliminarily found that Apple may have restricted competition to benefit its own solution Apple Pay. If confirmed, such conduct would be illegal under our competition rules.”
Statement of objections
EU said that it sent a charge sheet known as a statement of objections to Apple, detailing how the company has abused its dominant position for mobile wallets on iOS devices.
The Commission’s preliminary view is that Apple’s dominant position in the market for mobile wallets on its operating system iOS restricts competition by reserving access to NFC technology to Apple Pay.
“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,” says Vestager. “But this innovation has been prevented by Apple refusing others to access NFC on its devices.”
Apple in its defense said that its restrictions are made to protect users from security risks. However, Vestager rejected the company’s argument on security.
“Our investigation to date did not reveal any evidence that would point to such a higher security risk. On the contrary, evidence on our file indicates that Apple’s conduct cannot be justified by security concerns,” she says.
In response to that, Apple said Apple Pay is one of many options available for Europeans to make payments.
“We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment,” Apple said in a statement.
The EU is set to implement new rules called the “Digital Markets Act,” which will force Apple to open up its closed ecosystem or face fines of as much as 10 per cent of its global turnover, reports Reuters.