PayPal Played Role in EU Antitrust Complaint About Apple Wallet

[MacRumors]

Apple Pay competitor PayPal played a role in the EU's decision to target Apple with antitrust complaints about its mobile wallet, reports Bloomberg. PayPal was one of "multiple companies" that filed informal complaints about the way Apple restricts third-party apps from accessing the NFC capabilities of the iPhone, which in turn led to the European Commission issuing a Statement of Objections against Apple.

The European Commission believes that Apple is unfairly limiting access to the NFC chip, preventing PayPal, Venmo, banks, and other payment services from offering features that are equivalent to Apple Pay, which in turn limits the mobile payment options that iPhone users have access to in stores.

No third-party apps are able to access NFC on the iPhone, so Apple Pay is the only tap to pay payment method available. Apple claims that the restriction is designed to safeguard user privacy and security, but it will now face an EU investigation.

The European Commission has informed Apple of its preliminary view that it abused its dominant position in markets for mobile wallets on iOS devices. By limiting access to a standard technology used for contactless payments with mobile devices in stores ('Near-Field Communication (NFC)' or 'tap and go'), Apple restricts competition in the mobile wallets market on iOS.

PayPal has an Apple Pay-like tap to pay option that's available to Android users, and the company wants to be able to offer a similar feature on the iPhone. Such a feature would require PayPal to use the NFC chip in the iPhone, but it is not able to do so with Apple's current restrictions.

Apple does have plans to allow third-party apps to use the NFC chip for the upcoming "Tap to Pay on iPhone" feature that will allow compatible iPhones to accept payments through Apple Pay, contactless credit and debit cards, and other digital wallets with no hardware required, but it is not equivalent to the tap to pay Apple Pay equivalent that PayPal is after.

According to Apple, Apple Pay rivals like PayPal are popular on iPhone without a direct tap to pay option, but the company plans to "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."

This is not the first time that Apple has faced criticism for restricting access to NFC on the iPhone. Australian banks back in 2017 wanted access to NFC in order to launch an alternative to Apple Pay, but they were not successful.

Article Link: PayPal Played Role in EU Antitrust Complaint About Apple Wallet

 

[CWallace]

The "Dithering" podcast touched on this today and I tend to be in agreement with Ben Thompson that it would be okay if Apple opened up the NFC API to third party payment options, but that Apple Wallet should not be forced to support other payment services.

So you could use PayPal or some other payment option via the iPhone's NFC, but PayPal could not be included in Apple Wallet.

 

[Spock]

I have to side with PayPal on this, it is not really right that Apple added a hardware feature into the phone that only Apple applications can access and use. It is my device, I should have the choice in what tap to pay options that I can use with NFC.

 

[SoldOnApple]

If Wise can use tap and go payments with NFC using Apple Pay, why can't PayPal add themselves in the same way?

 

[MrTechAdvice]

Surprise Surprise

 

[4jasontv]

I have to side with PayPal on this, it is not really right that Apple added a hardware feature into the phone that only Apple applications can access and use. It is my device, I should have the choice in what tap to pay options that I can use with NFC.

That's like being upset that you can't use your Visa card to pay with Amex.

 

[JPack]

If Wise can use tap and go payments with NFC using Apple Pay, why can't PayPal add themselves in the same way?

The point is companies have to go through Apple Pay instead of directly interfacing with the NFC chip, which means Apple gets a cut no matter what.

It would be similar to if users were only able to take photos using the built-in Camera app.

 

[sorgo †]

Color me not shocked.

 

[You’re not me]

I’m starting to get the feeling that the EU is jealous of Apple’s success.

 

[MysticCow]

Why am I not surprised?

 

[Corsig]

Why should Apple Pay for R&D to develop hardware/software and let someone use it for free?

 

[TheYayAreaLiving 🎗️]

All these companies are targeting Apple. At they end they're not going to get anything out of it.

 

[mtnDewFTW]

It'll be interesting to see how these platforms adjust to being forced to open everything up. It's no longer a business decision but one made by regulators on what direction a platform should go next.

 

[california_kid]

WTF is an "informal complaint"?

Is this like saying "oh man, Apple won't let me access the NFC, but oh well I hope somebody does something about it"?

Or "oh man, Apple won't let me access the NFC! (Angrily shakes fist at iPhone)"

Or "there's a certain company that sounds like a fruit who won't let me access a certain feature that I wish I could use"

Or "I'm mad at Apple.....you figure out why"

Or "Hey EU regulators, try to access the NFC feature on an iPhone without Apple Pay...wink wink.."

 

[dk001]

The "Dithering" podcast touched on this today and I tend to be in agreement with Ben Thompson that it would be okay if Apple opened up the NFC API to third party payment options, but that Apple Wallet should not be forced to support other payment services.

So you could use PayPal or some other payment option via the iPhone's NFC, but PayPal could not be included in Apple Wallet.

That is short sighted. Why cut them off? If Apple allows all and 3rd party will only do theirs, most would move or stay with Apple's. Don't throw away users.

 

[siddavis]

WTF is an "informal complaint"?

"Maaaahhhhmmmmm! Kenny got a popsicle and I didn't!! No Fair!!!"
Informally of course

 

[dk001]

Why should Apple Pay for R&D to develop hardware/software and let someone use it for free?

Apple didn't invent NFC. They added it to the iPhone as a feature and then restricted the use of it.

 

[The Barron]

That's like being upset that you can't use your Visa card to pay with Amex.

That comment makes no sense at all.

 

[twolf2919]

I think Apple should more clearly identify what, in iOS, is considered an "app" - i.e. pieces of software that use the same public APIs available to other apps - and what is a built-in function (privileged software that could use special hardware - e.g. NFC chip - to accomplish its objective). That would go along way in clarifying what apps should or should not be able to access.

I understand that some consumers don't have the same concerns about security and privacy as others and simply want freedom in what mobile payment vendor they use, but on the other hand, there are many of us who buy iPhones *because* we want Apple to protect us from those problems and make the decisions for us. If Apple thinks that giving direct NFC access to 3rd-party apps, why should the EU force them to open it up to apps? Why can't consumers decide themselves? The EU says it wants to increase competition. But to those users who value security and privacy, the EU is taking away from the value of an iPhone to those users!

A user here suggested that it's his device - he should be able to decide that payment service he uses with NFC. Sure! So why didn't he buy a device that gave him that choice?!? To buy a device that doesn't have a feature and then try to force the device maker to add it via government intervention seems ridiculous.

 

[twolf2919]

Apple didn't invent NFC. They added it to the iPhone as a feature and then restricted the use of it.

Rubbish. They didn't add "NFC" as a feature and then restricted the use of it. "NFC" was never once advertised as a feature of the iPhone. What was advertised was ApplePay and Apple Wallet with the ability to handle contactless payments via NFC.

What right does the EU have - or any other body, for that matter - to dictate to a private company which parts of their products must be accessible to the public? Should the EU force car makers to provide public APIs to all vehicle functions and all sensors? Etc., etc.

Why does the EU need to get into the middle of this at all? If Apple's refusal to create a public API to its NFC chip and mobile payment apps such as PayPal can't provide NFC payments on iOS, then consumers that value PayPal can vote with their wallets and buy an Android device! Let the free market decide these things!

 

[d686546s]

I think Apple should more clearly identify what, in iOS, is considered an "app" - i.e. pieces of software that use the same public APIs available to other apps - and what is a built-in function (privileged software that could use special hardware - e.g. NFC chip - to accomplish its objective). That would go along way in clarifying what apps should or should not be able to access.

It's not a clarification problem. One way or another this will run into problems with regulators at some point, at least in the EU, because Apple is using its position in one area (smartphones) to gain a significant market advantage in another (payment services).

While Apple's market share is significantly lower in the EU than it is in the US, this still shuts competition out and down.

We'll see how it'll play out, but I frankly doubt that a significant portion of iOS users really bought the phone because it only allows one store or one payment option. People just go with it because they want their shiny iPhone.

We would only see how competitive Apple's services really are if they had to open up the iPhone. Right now I'm pretty convinced I'd keep using Apple Pay, but who knows, maybe a competitor would offer an even better service.

 

[d686546s]

What right does the EU have - or any other body, for that matter - to dictate to a private company (...)

Are you genuinely asking what right the legislative and regulatory bodies of a particular jurisdiction have to legislate and regulate that jurisdiction?

 

[simps100]

Admittedly don’t know how it works on Android but I’d hate to lose the convenience of Apple Pay, would be a shame if banks decided to start dropping support and forcing you to use their own separate apps, woild lose the whole convenience of Apples current implementation.

 

[dk001]

Rubbish. They didn't add "NFC" as a feature and then restricted the use of it. "NFC" was never once advertised as a feature of the iPhone. What was advertised was ApplePay and Apple Wallet with the ability to handle contactless payments via NFC.

What right does the EU have - or any other body, for that matter - to dictate to a private company which parts of their products must be accessible to the public? Should the EU force car makers to provide public APIs to all vehicle functions and all sensors? Etc., etc.

Why does the EU need to get into the middle of this at all? If Apple's refusal to create a public API to its NFC chip and mobile payment apps such as PayPal can't provide NFC payments on iOS, then consumers that value PayPal can vote with their wallets and buy an Android device! Let the free market decide these things!

Then why add it?

Reminder: Apple initially added support for NFC in 2014 with the iPhone 6 to allow for contactless NFC payments via Apple Pay. Since then, Apple has continually added additional functionality for NFC and NFC tags to subsequent iOS releases and iPhone models.

 

[dk001]

I think Apple should more clearly identify what, in iOS, is considered an "app" - i.e. pieces of software that use the same public APIs available to other apps - and what is a built-in function (privileged software that could use special hardware - e.g. NFC chip - to accomplish its objective). That would go along way in clarifying what apps should or should not be able to access.

...

Function vs App? That gets really grey when Apple uses a "function" to compete with 3rd party apps and/or uses it for its' own apps and cuts 3rd party out.