Apple is on the verge of putting an end to an extensive anti-monopoly investigation by the European Union (EU) into its mobile payment system. This could be achieved by offering multiple concessions to provide competitors with more access to its contactless technology system, thereby avoiding a massive penalty.
In 2022, the iPhone manufacturer was accused by the European Commission, the administrative branch of the EU, of violating competition regulations. Regulators in Brussels believed that Apple was exploiting its “tap-and-go” chips or near-field communication (NFC), thereby obstructing rivals and favouring its own Apple Pay system.
However, three insiders claimed regulators have now approved several remedies proposed by Apple back in January. These involve allowing developers free usage of its NFC technology on iOS devices, without necessarily employing Apple Pay or Apple Wallet. These propositions have been experimented with by Brussels officials and Apple has pledged to sustain them for ten years.
Although some technical aspects are being finalised by Apple, these sources stated that an accord is likely to happen in the coming weeks. However, there could still be hurdles around Apple’s commitments, and thus the timeframe for agreement is still changeable. The European Commission has opted not to comment.
Such an agreement could save Apple from penalties such as a fine equalling 10% of its global annual sales. Based on this, with the company’s projected revenues of $383 billion (€357 billion) for 2023, such a fine could amount to close to $40 billion.
Apple refused to provide a comment but referred to a preceding statement. It encompassed how it had offered commitments to provide third-party developers within the European Economic Area with an alternate payment option that doesn’t rely on Apple Pay or Apple Wallet. The statement added that Apple Pay would remain largely accessible and offering top-notch privacy, security, and user experience via over 3,000 issuing banks across all EEA countries.
As hundreds of millions of iPhones use Apple Pay, the resolution of this drawn-out investigation from the Brussels regulators happens at a time when Apple’s interactions with regulators are particularly strained.
The firm recently endured a heftiest ever penalty of €1.8 billion levied by Brussels, owing to anti-competitive actions linked to music streaming services; a sanction that Apple is contesting. Moreover, the company is poised to become the inaugural technology corporation confronted with new allegations under the stringent Digital Markets Act of the union, an act formulated to bolster rivalry in the continent’s digital markets. – The Financial Times Limited 2024 Copyright.