Euro-American clash over Apple Pay

Apple’s latest antitrust fight concerns Apple Pay. The European Commission announced yesterday that it believes Apple violated antitrust rules by not allowing rival mobile wallets to offer tap-to-pay on the iPhone. Apple allows developers to access the iPhone’s NFC chip, but not to connect to payment systems in physical stores. That means Apple Pay is the only option on iPhones – and the EU isn’t happy about that.

The commission sent Apple a “preliminary statement” saying the company was “abusing its dominant position” by supporting its own contactless payment system. Apple now has a chance to address EU doubts. The company can also request a hearing on this subject.

“Apple has built a closed ecosystem around its devices and operating system,” said Margrethe Vestager, head of the EU’s antitrust office, who is also the EU’s competition commissioner. – Apple controls the gates of this ecosystem, setting the rules of the game for anyone who wants to reach consumers using Apple devices.

If the EU finds Apple guilty of anti-competitive behavior, it could be forced to pay up to 30%. your Apple Pay earnings. It’s not a huge amount of money for Apple, at least compared to the revenue it makes from the devices, but still.

Apple says consumers have other choices. For example, they can buy another phone that will use a different payment system. Apple also told the Wall Street Journal that it “sets industry-leading privacy and security standards,” while offering potential competitors access to technology on the same terms as Apple.

The objection echoes Apple’s defense in other antitrust cases, including those involving the App Store: the company often insists that features that appear to form a closed ecosystem that guides consumers through its products are only warranties.

The accusations come just as Europe is starting to come down hard on the US tech giants. The Commission’s statement yesterday came almost exactly a year after EU complaints over Apple’s handling of competing music apps, which also arose following previous antitrust cases and allegations.

In March, officials also agreed to new competition rules that would require major changes to the App Store and iMessage, as well as Google and Amazon services.

Apple Pay is under observation at an interesting time. The company is preparing to allow iPhone users to accept contactless payments using built-in NFC technology without any additional hardware. While Apple Pay would replace Square dongles and other cash and credit card payment terminals, it would not directly replace the software and services offered by Square and others.

In fact, Apple’s move could embolden Square’s competitors. Apple has selected Stripe and Shopify as the first partners for its new tap-to-pay service. Apple could sell more iPads as cash registers, and its preferred software partners will provide payment services.

Meanwhile, NFC is no longer a hot new payment technology. QR codes, first popularized in Chinese payment apps, have spread to other systems around the world. Developers don’t need phone maker approval for QR codes, and consumers seem to appreciate them.

This shows the problems faced by regulators in keeping up with rapidly changing technology. Rather than asking about NFC mobile wallets, EU could explain how Apple charges Stripe and Shopify for early access to its latest tap-to-pay service, or whether there are issues discouraging code payments QR. There is a tendency in Washington and Brussels to fight old battles, not new ones. And it’s not the big tech companies paying for it.

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