Apple is set to conclude a long-running EU antitrust investigation into its mobile payments system by making a series of concessions, avoiding a potential $40 billion fine.
TakeAway Points:
- In order to avoid a possible $40 billion fine, Apple has agreed to resolve an EU antitrust investigation by providing developers with free NFC access.
- By allowing third-party NFC payments outside of Apple Pay and Wallet, the settlement calls for keeping these restrictions in place for ten years.
- The EU’s Digital Markets Act and a €1.8 billion fine are among the more significant regulatory obstacles Apple is now facing.
Apple settles EU Probes
The European Commission, the executive arm of the EU, charged Apple in 2022 with breaking competition law, alleging that the company was preventing competitors from accessing near-field communication (NFC) technology to benefit its own Apple Pay system. According to three people familiar with the matter, regulators have accepted several measures that Apple committed to in January this year.
These measures include providing developers with free access to its NFC technology on iOS devices without requiring the use of Apple Pay or Apple Wallet. Brussels officials have been testing these measures, which Apple has offered to maintain for a decade. Apple is still finalizing technical details, but a settlement is likely in the coming weeks. The European Commission declined to comment on the matter.
Apple avoids serious Fines
A settlement would help Apple avoid sanctions such as a fine of up to 10% of the company’s total worldwide annual turnover. With Apple’s revenues reaching $383 billion in 2023, this could have meant a fine of approximately $40 billion. Apple declined to comment directly but referred to an earlier statement:
“Through our ongoing discussions with the European Commission, we have offered commitments to provide third-party developers in the European Economic Area with an option that will enable their users to make NFC contactless payments from within their iOS apps, separate from Apple Pay and Apple Wallet. Apple Pay will continue to be a broadly available option, and over 3,000 issuing banks across all EEA countries will still be able to offer the unparalleled privacy and security of Apple Pay, as well as its great user experience.”
The statement also emphasized that Apple Pay would continue to be a broadly available option, with over 3,000 issuing banks across all EEA countries offering the service.
Regulatory Challenges
The conclusion of this investigation comes at a time of particularly tense relationships between Apple and regulators. Recently, Brussels fined the company a record €1.8 billion over anti-competitive practices related to music streaming services, a fine that Apple has appealed.
Additionally, Apple is set to be the first tech firm to face fresh charges under the EU’s Digital Markets Act (DMA), which aims to enable competition in digital markets. Margrethe Vestager, the EU’s competition chief, highlighted that Apple has several “very serious” issues under the DMA.
She noted, “We have a number of Apple issues, I find them very serious. I was very surprised that we would have such suspicions of Apple being non-compliant.” The DMA investigation includes concerns about whether Apple is blocking businesses from informing users about cheaper options for products or subscriptions outside of the App Store.
