Apple has avoided substantial fines from the European Commission (EC) by agreeing to open its NFC chip technology, which enables contactless payments on iPhones, to third-party providers.
The EC announced that Apple’s commitments are now legally binding under EU antitrust regulations, resolving an antitrust case that could have resulted in fines potentially reaching billions of dollars.
This decade-long commitment stems from an offer made by Apple in January, in which the company agrees to allow third-party mobile wallet and payment service providers to access and use the NFC functionality on iOS devices via a set of APIs, free of charge, and without the need to use Apple Pay or Apple Wallet.
To facilitate this, Apple will develop the necessary APIs to ensure similar access to the NFC components in Host Card Emulation (HCE) mode. This technology securely stores payment credentials and processes transactions without requiring an on-device secure element.
The agreement encompasses all third-party mobile wallet app developers operating in the European Economic Area (EEA) and applies to all iOS users with an Apple ID registered in the EEA. Moreover, Apple will not restrict the use of these apps for payments at stores outside the EEA.
In addition, Apple has committed to allowing users to set preferred payment apps as defaults, accessing authentication features such as FaceID, and implementing a suppression mechanism.
These updates enable payment initiation through HCE apps at various industry-certified terminals, including merchant devices. The new commitments eliminate the previous requirement for developers to hold a license as a payment service provider (PSP) or to sign binding agreements with a PSP to access NFC functionality. Additionally, developers will have access to NFC technology to create pre-built payment apps for third-party mobile wallet providers.
The EC stated that Apple’s final commitments adequately addressed its concerns regarding the company’s restrictions on third-party mobile wallet developers’ access to NFC payments for EEA iOS users, leading to the decision to make these commitments legally binding.
While this issue appears settled in Europe, Apple is also facing challenges in the U.S., where the Justice Department has included access to NFC technology in a broad lawsuit accusing the company of monopolizing the smartphone market.