European Regulator Accuses Apple of Violating Competition Law on ‘Tap and Go’ Tech
Europe’s antitrust regulator has accused Apple of restricting rivals’ access to its payment technology, a move that could force the corporation to modify how it operates and expose it to a huge fine.
The regulator said the US Corporation may have infringed on the competition law by prohibiting rivals from using its “tap and go” technology, according to a preliminary investigation. However, the tech giant has denied the charge and stated it will cooperate with the Commission.
But if the charges are sustained, Apple may face a penalty of up to 10% of its global turnover, which was $36.6 billion last year.
In a statement, Margrethe Vestager, Executive Vice-President, in-charge of the competition policy, said: “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 the benefit of its own solution Apple Pay. If confirmed, such conduct would be illegal under our competition rules,” she added.
APPLE’S TAP AND GO TECHNOLOGY
In February this year, Apple announced its plans to introduce “tap and go” or “tap and pay” on iPhone.
At that time, the tech giant said that payment platforms and app developers will be able to incorporate Tap to Pay on iPhone into their iOS apps and provide it as a payment option to their business clients.
In a statement, Jennifer Bailey, Apple’s vice-president of Apple Pay and Apple Wallet, said: “As more and more consumers are tapping to pay with digital wallets and credit cards, Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone.”
“In collaboration with payment platforms, app developers, and payment networks, we’re making it easier than ever for businesses of all sizes — from solopreneurs to large retailers — to seamlessly accept contactless payments and continue to grow their business,” it added.
Apple stated that customers’ payment data will be protected by the same technology that makes Apple Pay private and secure with tap to pay on iPhone.
EU VS APPLE
According to the Commission, Apple’s actions have an “exclusionary effect” on competitors, resulting in less innovation and fewer choices for iPhone users when it comes to mobile wallets.
However, in response, Apple stated its payment mechanism was just one of the many accessible to European customers. It also claimed to have “ensured equal access” to mobile payment technology, as well as created industry-leading standards for privacy and security.
Furthermore, Apple stated: “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.”
The EU antitrust regulators, on the other hand, said their study had turned up no evidence that a more open architecture would pose a greater security risk.
The EU had in 2015 accused Apple of anti-competitive conduct when Apple Pay was launched.
Last year, after competitor business Spotify filed a complaint, EU regulators accused Apple of undermining competition in music streaming markets.