Apple Accused of Breaking EU Competition Laws Over Digital Wallets

European Union Competition Commissioner Margrethe Vestager speaks at a press conference in Brussels on May 2, 2022. (Virginia Mayo/AP Photo)

European Union regulators have accused Apple of breaking the law by stifling competition in markets for mobile wallets, a move that could lead to billions of dollars in fines.

The European Commission (EC) said in a May 2 statement that it had sent a charge sheet known as a statement of objections to Apple, alleging that the tech giant had abused its dominant position in markets for mobile wallets on iOS devices, restricting rivals’ access to the detriment of consumer choice.

“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices,” EU Competition Commissioner Margrethe Vestager said, noting that a preliminary finding determined that Apple may have restricted competition to the benefit of Apple Pay, the company’s own mobile wallet solution.

“If confirmed, such a conduct would be illegal under our competition rules.”

‘Less Choice for Consumers’

The EC said in its statement that its initial findings were that Apple had abused its dominant market position for mobile wallets on iOS by reserving access to NFC technology to Apple Pay.

“This has an exclusionary effect on competitors and leads to less innovation and less choice for consumers for mobile wallets on iPhones,” the statement reads.

While the regulators didn’t specify what penalty they would seek for Apple if the preliminary findings of the anti-trust probe are confirmed, it made clear that Apple’s actions could amount to a violation of EU antitrust laws, with a potentially hefty fine.

Breaches of the EU competition rules could lead to a fine amounting to 10 percent of Apple’s total global turnover, which in 2021 was $365.8 billion, meaning Apple could be hit with a fine of roughly $36.6 billion.

Apple didn’t respond to a request for comment by press time, but the company has previously stated that it limits third-party access to its contactless payment technology in order to bolster security.

Vestager rejected Apple’s security argument, however.

“Our investigation to date did not reveal any evidence that would point to such a higher security risk,” she told a press conference in Brussels. “On the contrary, evidence on our file indicates that Apple’s conduct cannot be justified by security concerns.”

European Union competition commissioner Margrethe Vestager speaks at a press conference in Brussels on May 2, 2022. (Virginia Mayo/AP Photo)

Apple told The Associated Press in a statement that it “will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment.”

The company also told AP that its digital wallet service is one of many payment solutions available to EU consumers and that it “has ensured equal access” to its NFC technology.

Apple will now have the opportunity to review the documents in the EC’s digital wallet anti-trust probe and can request an oral hearing before regulators to present its comments on the case.

The development marks the second EU charge against Apple after regulators last year accused the company of distorting competition in the market for music streaming.