European Union regulators said on Monday that Apple had violated antitrust laws by unfairly undermining companies whose payment services compete with Apple Pay, in the latest example of European authorities cracking down on the world’s largest technology companies.
Apple abused its dominance in consumer electronics by not allowing PayPal and others access to technology in the iPhone and Apple Watch that allows people to make a purchase with a quick tap, according to a preliminary ruling announced by the European Commission, the European Union’s executive body.
The panel argues that Apple is preventing competing services from accessing the hardware and software on their devices that allow interaction with in-store payment terminals, known as Near Field Communication, or NFC, technology.
The case illustrates Europe’s strategy in using several types of measures to regulate the digital economy. In addition to antitrust issues, the European Union has approved two new laws since March aimed at addressing what policymakers consider to be Anti-competitive business practices And weak policies from before Internet and social media companies To remove illegal content from their websites and services.
The charges against Apple, following an investigation that began in 2020, were announced in Brussels on Monday by Margrethe Vestager, the European Commission’s executive vice president responsible for antitrust enforcement. Apple will now have an opportunity to respond before announcing a final ruling. The company can be fined up to 10 percent of its global revenue. It can also reach a settlement with regulators.
Regulators said Apple has used its control of the iPhone and other products to become the dominant service in the fast-growing mobile payments industry.
“Mobile payments play a rapidly growing role in our digital economy,” Ms Vestager said in a statement. “We have indications that Apple has restricted third-party access to key technology needed to develop competing mobile wallet solutions on Apple devices.”
Apple said Monday that it has provided an “easy and secure” way to make payments, and that its policies do not restrict competition.
“Apple Pay is just one of many options available to European consumers to make payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security,” the statement said.
“We will continue to engage with the Commission to ensure that European consumers have access to the payment option of their choice in a safe and secure environment,” Apple said.
European regulators are trying to tackle what they see as abusive business practices by big tech companies that use their dominance in one region to dominate neighboring markets. Last year, Ms Vestager brought antitrust charges against Apple in response to complaints from Spotify and others about a 30 percent commission charged by the company on in-app purchases, an issue still under review.
Google has been fined billions of euros for using its search engine dominance, Android mobile operating system and ad services to outsmart competitors. Amazon is under investigation for abusing the dominance of its shopping service to harm merchants who rely on its website to reach customers. Facebook is being investigated for anticompetitive practices related to its control of the social networking market.
Europe’s tough approach to tech regulation has long found little resonance in the US, but US authorities have begun using antitrust enforcement to undermine the power of big tech companies. The Department of Justice has brought antitrust charges against Google and the Federal Trade Commission is going after Facebook.