Sources: EU may accept Apple's proposal to open its NFC payments tech to rivals, and may close its antitrust probe in May, letting Apple avoid hefty fines

Apple's (AAPL.O) offer to open its tap-and-go mobile payments system to rivals is set to be approved by EU antitrust regulators as soon …

Reuters 2024-04-20 Foo Yun Chee

Context & Ripple Effects

The case grew from the EU's earlier concern that Apple was restricting rivals' access to the iPhone NFC chip. Apple then offered access to its tap-and-go system in December, positioning commitments rather than a fine as the route to resolve the investigation through its proposed rival-wallet access.

A potential acceptance would make this an important test of whether targeted access remedies can curb platform control without a formal penalty. Later coverage indicates the payments inquiry was moving toward settlement under commitments Apple made in January.

First-order effects

If accepted, Apple would open NFC-based payment functionality to rival wallet providers, reducing Apple Pay's exclusive control over that iPhone capability in the EU.
The Commission could close the payments investigation without imposing the potential fine, while rival wallet developers gain a defined route to compete on compatible iPhones.

Second-order effects

Banks, payment networks and wallet providers could compete for iPhone users on wallet features and distribution rather than being limited by NFC access.
The outcome increases pressure on Apple to demonstrate that access terms work in practice; disputes over implementation could shift competition from chip access to technical and commercial conditions.

Third-order effects

The case points to a remedy model in which regulators seek interoperability at critical device interfaces rather than forcing wholesale changes to a platform's business model.
If such commitments prove enforceable, NFC access could become a precedent for challenges to other gatekeeper-controlled hardware and software interfaces; their impact will depend on the scope and durability of the access terms.

The trend: European competition enforcement is increasingly targeting gatekeeper control of technical interfaces through interoperability commitments that enable adjacent services to compete.

Discussion

@dmtrsprvt Dimitri on x
@MacRumors This is the worst thing the EU could do. Germany's banks have bad apps. Now they are going to force users to use their crappy apps. The lobbyists of the banks surely played a role in this. Life was so easy with the wallet app. Now I prepare myself for the worst.
@supadav03 @supadav03 on x
@9to5mac @bzamayo Legitimately asking...can anyone tell me one reason you'd want to use something besides the Apple Pay/Wallet that's already built into the iPhone?
@kross_roads @kross_roads on x
$PYPL $AAPL Apple's proposal to the EU, which will open up NFC chip access to others such as PayPal for an Apple Pay-like experience is likely to be accepted in May. The back and forth on the actual language of the settlement since January, hence the delay. [image]
@kross_roads @kross_roads on x
@disk0nekted Yep, it is. And something else I love about this and the DMA in EU: PayPal isn't just sitting around hoping macro gets better and competition is less severe. It feels like PayPal did that in '22 for the most part, and part of '23. That's the sign of a company in trou…
@florian4gamers Florian Mueller on x
The mutual interest that the EU Commission and Apple have here is prioritization as there are so many EC-Apple cases and inquiries already. App distribution is a far higher priority to both. Sooner or later Apple will have to open up the tap-to-pay market in the U.S. as well.
@kross_roads @kross_roads on x
And as a reminder, Apple was sued last month by the DoJ in the US in part for restrictive access to the NFC chip. https://x.com/...

Chronicles