EU Plans to Hit Apple With Antitrust Charges Over Apple Pay

[davidjschloss]

No, not in the slightest, especially in Europe.

Marketshare is not really a test in European antitrust law, the test is if they have a material ability to impact consumer pricing. Antitrust actions against companies with minority marketshares aren't uncommon in the EU.

Thanks for that (factual) explanation. What do you think in this case the impact to consumer pricing is? If I use my HSBC card though Apple Pay, or I get a metro card through Apple Pay, where is the impact on my pricing?

 

[Luke MacWalker]

I don't really see an issue with Apple opining up access to other payment systems through an API they manage. In any case, the ecosystem mentality of years ago is clearly changing. The changes may be somewhat political and arbitrary but they are there nonetheless. In a way, long term, it may be beneficial as it provides a somewhat easier path to move between systems of choice rather than being locked down and being unable to make changes.

I don't expect Apple to be simply a tool provider but I do think they have to rethink fundamentally what it means to build an ecosystem while not "trapping" users except through a superior experience.

Well, in this particular case, I don't see how users are locked in the Apple ecosystem by Pay. If they want to switch to Android, they will just have to register their cards in the Android wallet. Not a big hurdle I think…

 

[Ries]

I didn't know the EU and South Korea had so much in common. They may be geographically separate, but they live in the same fantasy world where one company can build something great, and others are entitled to use it for free even though other options are available

You could always move to the US and get exploited by companies all you want? Why pay $70 in Europe for an epipen, when you can pay $700 in the US!

 

[MauiPa]

Does this mean the EU will go after visa unless they allow Samsung pay and Apple Pay on their tap to pay cards? Fair is fair

 

[0924487]

What does full access of NFC define as? I know there are apps out there on iPhone that read and write to NFC tags. NFC21Reader, Amiiboss, and I think four years ago Abbott released I think the first iOS app to take advantage of NFC on iPhones, allowing activation and reading of NFC on Freestyle Libre sensors. But maybe there's an angle to development and protocols I'm just not familiar with.

You can read, write and monitor anything you want. Not just what Apple permits.

For example, many NFC tags (Mifare, etc) are proprietary, if you don't have full access to the chip at machine-level, you can't "hack" those tags because Apple would never give you an API to do that.

You also can't read out what's in your credit card NFC, but if you have full access to the chip, you will be able to see the sectors in their encrypted format. You can then research ways to break those encryptions or to clone those to a blank tag, etc.

Think about the current system as you clicking a list of provided phrases to enter into a comment box, vs having the full keyboard.

 

[jz0309]

The who does? Apple?

what is it that YOU want?

 

[PlayUltimate]

I suspect much of this is due to consumers giving Apple giving more control over their daily activity. The issue, IMO, is not that Apple is coercing anyone to use their stuff but that consumers are freely choosing to use Apple. Thus their ecosystem has grown organically and not through nefarious means.
But Apple, a US company, through that growth has limited the opportunities for local businesses. In both S. Korea and greater Europe, Apple has had an impact on local businesses (Samsung, Nokia?) Thus, it is no surprise to see some attempts at protectionism.

 

[ian87w]

In my country, we have dozens of different eWallets for payments/transactions, and they all work on iPhones as well as Android. They all contactless. How? They use QR codes.

Sometimes innovation can happen. NFC is not a requirement.

 

[0924487]

Whow 16 mounts to “investigate” this. Everybody knows NFC is closed on a iPhone, why did it take her so long?

Our EU system is a money pit with stupid rules.

market analysis.

 

[subi257]

Because the EU antitrust law uses market power as a determinant.

That includes things such as barriers to entry, profitability, and brand loyalty. If few other companies can make a deal with banks and encourage merchants to use another type of NFC, that makes Apple’s implementation of NFC on their dominant iPhone subject to antitrust.

So, based on that it almost pays to be a not so popular brand. The brands that ar going the best will get beat up the most.....stifling the advancement of technology.

 

[jz0309]

They should go farther: stop selling iPhone anywhere outside US (where the government is in Apple's pocket).

so what exactly is not working for YOU?

 

[Robert.Walter]

No, not in the slightest, especially in Europe.

Marketshare is not really a test in European antitrust law, the test is if they have a material ability to impact consumer pricing. Antitrust actions against companies with minority marketshares aren't uncommon in the EU.

I can’t speak to your last point regarding minority marketshare companies being docked by EU for non competitive issues, but as our company designee for completing EU questionnaires regarding competitors’ and customer mergers, my recollection is that a company with more than 30% draws significant scrutiny when it proposed to grow by competitor acquisition.

can also say that we always opposed our competitors growing larger by removing a competitor (bad for the market and bad for us) but that the proposed merger always took place.

 

[Ries]

Does this mean the EU will go after visa unless they allow Samsung pay and Apple Pay on their tap to pay cards? Fair is fair

Nothing is stopping Apple from putting Apple Pay on Samsung? However Samsung can't the other way around.

 

[Nozuka]

Thanks for that (factual) explanation. What do you think in this case the impact to consumer pricing is? If I use my HSBC card though Apple Pay, or I get a metro card through Apple Pay, where is the impact on my pricing?

Apple is rumored to take about 0.15% cut from every transaction. (Likely changes for every country) The bank will want to get this money back somehow. So they will increase the transaction costs for stores. And the stores will increase product prices. In the end it will always be the customer who pays.

 

[jz0309]

The walled garden is crumbling. Is that sunshine I see on the other side?

I think it is dark clouds and thunder brewing ...

 

[Appleman3546]

Yeah, this was a long time coming and inevietable. Apple opens api's up for so many things, so it was a bit obvious when they did not open this up too that they were trying to force their way into the highly competitive market of payment transactions

 

[subi257]

How do these POS eu countries feel like they can force businesses to operate in a way they want them to at every turn? If you dont like the way Apple does it, there are other phones with other operating systems. If you were forced to buy an iphone, then I would agree with the eu stance. But since you arent, they are full of excrement.

well, we/USA forced all manufacturers of automobiles to use our stupid incandescent headlights....and halogen in the same configuration was illegal also.

 

[Robert.Walter]

2 words

About time.


Edit:
Reason I say this, I think NFC should be open, If you have an android phone l in my country you can have a higher security level needed for some government services.
That's not all, NFC should be open from the beginning, but Apple thinks it's a good idea not to open it, for 1 reason only, to subtract more cash from consumers.

Your post makes no sense.

 

[MauiPa]

2 words

About time.


Edit:
Reason I say this, I think NFC should be open, If you have an android phone l in my country you can have a higher security level needed for some government services.
That's not all, NFC should be open from the beginning, but Apple thinks it's a good idea not to open it, for 1 reason only, to subtract more cash from consumers.

Maybe you can explain your rules for when a company develops a product then it becomes a commodity that the company has no control over. Should Microsoft be required to allow windows 11 to run on macs, should Xbox be required to have Apple Pay as a payment method, should visa be required to allow Mastercard payments on their cards? Keep free enterprise free and allowed to compete. No one is harmed by Apple Pay being the sole provider FOR the NFC chip, you can still use whatever credit card you choose. Not seeing it.
I look forward to your enlightening response

 

[_Spinn_]

What is it that the EU doesn't understand about consumers not wanting massive fragmentation in every aspect of their lives? For example, if banks are allowed direct access to the NFC chip they're going to force you to open/use their terrible apps to use Apple Pay. Without Apple strong-arming them, they would have already done so in Australia.

Not sure if anyone has posted this yet but the worst part about opening it up to everyone is that banks can then force you to use their own proprietary contactless payment app. Not sure if it's still the case but when I had a Pixel 5 last year I was unable to add my Barclays card to Google Pay as Barclays only allowed contactless payments through their own app. A nightmare if you want to regularly switch between different cards from different banks. This fragmentation is a bit like the opposite of their USB-C decision which aims to simplify and standardise.

The banks would love to be able to provide Apple-Pay-like functionality for their cards without paying Apple a cut of their transaction fees. If Apple is forced to open NFC up for payment purposes (it already is usable by apps for other things), banks would most likely start dropping Apple Pay support and force you to use their own apps.

This is 100% my concern. If banks are allowed to use NFC in their apps for payments they with almost certainly pull support for Wallet and ApplePay. This will lead to fragmentation and a terrible user experience. Having to use other apps for things like Walmart Pay or Kroger Pay is dumb enough - now imagine the same thing with every bank.

The only way opening this up would probably be ok is if Apple was allowed to require banks to support Wallet and ApplePay in order to also get native NFC payment access in their own apps. Considering that this is coming from the angle of anti-trust though I doubt Apple would be allowed to enforce this requirement.

 

[mlody]

Well lets see how this openness worked for Google and their wallet? Last time i check there isnt even a good and reliable NFC wallet that works, so those stupid commissioers what to turn in something that just works perfectly into a f… chaos that exists on Android- no thank you

 

[Zarniwoop]

Exactly, I have all of my cards in the Apple wallet, including store cards, etc and I can and do use whatever card I choose to use. The wallet is just a conduit.

EU is really looking to stifle new technology progress. It would get to the point where no company will want to invest R&D money because the EU will just cause it to be wasted.

Edit: part of what I claimed here was based on Apple preventing the use of NFC in Wallet passbook, but there’s a way: when a company applies for a special permission and signs an NDA, they do get an access to Apple Wallet NFC API’s. Sorry for incorrect statement. Can you use your iPhone to enter an amusement park (without a stupid last decade barcode screen shots) with contactless ticket, without even opening the phone, or can you buy a train / airline ticket and use then NFC to access the train /airline? No, because Apple is stifling competition and preventents companies to be innovative.

Can you charge a 30 -day metrocard to your iPhone? You can for Android, but not for iPhone.

For instance, a French operator SNCF uses NFC on Android phones for traveling in trains. Other option is to show a QR-code. But if that is so great, why doesn’t Apple use it instead of NFC?

NFC ticket is not available for an iPhone because Apple is protecting their Apple Pay revenues.

Other example: https://www.scotrail.co.uk/about-sc...L8TE5PaReLk-1633535149-0-gqNtZGzNAmWjcnBszQel

”You can now load ScotRail Smart tickets onto ScotRail and SPT Subway Smartcards using an NFC-enabled Android phone and the latest version of the ScotRail app.”

APPLE IS STIFLING COMPETITION! Hence, they are under investigation.

 

[MauiPa]

well, we/USA forced all manufacturers of automobiles to use our stupid incandescent headlights....and halogen in the same configuration was illegal also.

Huh?

 

[deeddawg]

Wonder if we'll see an upcoming iPhone 14 EU Edition with a USBC power port and dropped ApplePay support.

Rest of the world will get the usual models.

 

[Robert.Walter]

My only complaint about this article is that it has needlessly been placed in the restricted “Politics” category of limiting who can comment on it.

Why is it that European antitrust complaint articles are censored but U.S. antitrust articles are not? ?

Because the US is lousy on anti trust enforcement by essentially approving every big merger that comes along?

Could also be because the MR editors were different and there is no clear criteria for exercising the political assignment.