Apple opens up NFC payments to rivals on iPhone after EU probe

The iPhone maker made a series of commitments to address concerns that it is illegally restricting competition in the mobile wallet space, the European Commission announced on Thursday. Chief among them is a pledge to give access to NFC functionality to third-party mobile wallets and to allow users to set any wallet as their default option where previously they were tied to Apple Pay.

"Without access to the iPhone's NFC functionalities, competitors cannot reach Apple users...By excluding others, Apple unfairly shielded its own mobile wallet from competition," said European Commission executive vice president and competition commissioner Margrethe Vestager.

The Commission opened a formal antitrust investigation into Apple's behaviour in June 2020 and two years later raised concerns that Apple abused its dominant position in the market – it has significant market power in the mobile devices space as well as being considered dominant in mobile wallets – by restricting access to the technology needed to make payments from iPhones. Apple responded with a series of commitments earlier this year, which were tested by the Commission and then tweaked.

The Commission outlined the new set of commitments in a very wordy statement, but also included a handy infographic to save us rehashing them all. The commitments are legally binding and Apple will have to adhere to them for at least 10 years. It has until 25 July to implement them, which means iPhone users will not have to wait much longer to be able to use an alternative mobile wallet, should they so desire.

Apple users being the loyal types that they are will doubtless stick with Apple Pay for the most part. But the important thing for the EU is that Apple is being forced, slowly but surely, to open up its closed ecosystem.

Earlier this year the Commission levied a €1.8 billion-plus fine on Apple for abusing its dominant position in the market for the distribution of music streaming apps following a complaint from Spotify. As well as that hefty financial penalty, Apple was ordered to remove anti-steering provisions and to allow developers of music subscription apps to communicate freely with their own users.

Doubtless, Apple feared receiving a similar punishment if it did not play ball with the EU on the mobile wallet investigation.

"By excluding competitors from the market, it may have had a negative impact on innovation. This reduction in choice and innovation is harmful. It is harmful to consumers and it is illegal under EU competition rules," Vestager said.

"From now on, Apple can no longer use its control over the iPhone ecosystem to keep other mobile wallets out of the market. Competing wallet developers, as well as consumers, will benefit from these changes, opening up innovation and choice, while keeping payments secure," she concluded.