Apple Pay draws EU antitrust scrutiny

Apple Pay, the iPhone maker’s mobile wallet, has caught the eye of EU antitrust investigators, who have asked payment companies for feedback on the service, MLex has learned.

The scrutiny signals the European Commission’s growing interest in the new digital frontiers of payment technologies after it started taking a closer look at Facebook’s Libra cryptocurrency earlier this year.

A year ago, EU competition commissioner Margrethe Vestager said she was aware that Apple was limiting access to the iPhone’s in-built chip that enables contactless payments — the Near-Field Communication interface.

But Vestager pointed to market entry by the likes of Google and Samsung and didn’t trigger a probe.
Now, the EU’s antitrust agency is understood to have sought input from companies using Apple Pay, including online-payment providers, banks and app businesses.

One set of questions sent to companies in September focused on how Apple directs users entering an in-app purchase on their iPhone toward Apple Pay, over other payment methods, MLex has learned.

A commission spokesperson said the regulator was monitoring “possible anti-competitive market practices and abusive conduct.”

“In this context, the commission is actively monitoring the development of mobile-payment solutions, the behavior by operators active in the payments sector, including mobile payments,” the authority said.

The regulator had no direct comment on the questionnaires. Their content isn’t public.

NFC criticism

Apple has attracted criticism in recent years for limiting the use of the NFC chip only to cards included in the iPhone’s wallet. Some banks and rivals have argued that this reduces the attractiveness of alternative payment services on the iPhone.

Mobile phones using Google’s Android operating system are said to allow all cards and banking apps access to the NFC chip.

Rivals are understood to have flagged concerns to the commission about the way iPhone users are prompted to use Apple Pay ahead of other payment methods.

Other objections raised to investigators in Brussels relate to Apple’s alleged refusal to carry competing payment methods in its wallet.

Apple has in the past defended restricting access to the NFC chip as a way of ensuring maximum confidentiality for sensitive banking data. The increased security of Apple’s payment system is said to be one of its attractions for consumers.

It has said that payment providers can access iPhone users using alternative technologies, like QR codes, which once scanned can trigger a payment.

In December, Apple settled a complaint to the Swiss competition authority by a payment company called TWINT, which works by scanning QR codes or inputting codes provided by the merchant.

Apple said it would help TWINT override iPhone software that launched Apple Pay when a payment was being processed.

The payments market has experienced an intense period of change as the traditional model of banks and card providers has been upended by transactions online and through mobile devices. This has thrust alternative providers to the fore — a trend the commission is watching closely.

This has seen the emergence of the likes of Revolut, PayPal, iDeal and Google Pay. The commission has an open investigation into how the market-entry of such new providers may be limited in Poland and the Netherlands.