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Apple will give third-party wallet providers access to NFC on the iPhone for 10 years

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Following the antitrust investigation against Apple regarding Apple Pay, the European Commission sent Apple a statement of objections in May 2022. The Commission found that Apple was abusing its dominant position in the iOS mobile wallet market. Apple limited the NFC capability on the iPhone to the Apple Pay mobile wallet, thereby preventing other payment providers from offering contactless payments similar to Apple Pay. In response to the concerns raised by the Commission, Apple accepted the following commitments in January 2024.

To address the Commission’s competition concerns, Apple initially proposed the following commitments:

  • To allow third-party wallet providers to access NFC input on iOS devices for free, without having to use Apple Pay or Apple Wallet. Apple will enable NFC access in Host Card Emulation (‘HCE’) mode. HCE makes it possible to securely store payment credentials and complete transactions using NFC, without relying on a secure element inside the device.
  • Apply a fair, objective, transparent and non-discriminatory process and eligibility criteria to grant NFC access to third-party mobile wallet application developers.
  • To allow users to easily set an HCE payment app as their default app for in-store payments and use relevant functions such as Field Detect (which opens the user’s default payment app when a locked iPhone is presented to an NFC reader), Double Click (which activates the default payment app with a double tap on the phone’s side or home button), and authentication tools such as Touch ID, Face ID, and a device passcode.
  • Establish a monitoring mechanism and a separate dispute resolution system to enable independent review of Apple’s decisions restricting access.
  • Apply the above obligations to all third-party mobile application developers located in the European Economic Area (‘EEA’) and to all iOS users with an Apple ID registered in the EEA, even when temporarily traveling outside the EEA.

The Commission conducted a discussion with all third parties interested in verifying whether Apple’s commitments remove all competition concerns. Based on the feedback, Apple has now revised its initial proposal and committed to the following actions:

  • Expand the ability to initiate payments with HCE payment apps on other industry-certified terminals, such as merchant phones or terminal devices (so-called SoftPOS), if enabled.
  • expressly acknowledge that HCE developers are not precluded from integrating the HCE payment function with NFC functionality or other use cases.
  • Remove the requirement for developers to have a license as a payment service provider (‘PSP’) or a binding agreement with a PSP to access NFC input.
  • To enable NFC access for developers to pre-build payment apps for third-party mobile wallet providers.
  • Update the HCE architecture to conform to evolving industry standards used by Apple Pay, and continue to update standards even if they are no longer implemented by Apple Pay, under certain conditions.
  • To allow developers to easily ask users to set the default payment app and direct users to the default NFC settings page, enabling default in just a few clicks.
  • Comply with the same industry standard specifications as HCE payment application developers and protect confidential information obtained in the context of an audit.
  • To shorten deadlines for settling disputes. Moreover, Apple offered independence and additional procedural guarantees to the monitoring trustee.

Following the final commitments above, the Commission decided to make them legally binding on Apple. So, Apple will have to meet the above obligations for 10 years across the EEA. The implementation of these obligations will be under the supervision of a supervisory trustee.

Margrethe Vestager, senior vice president in charge of competition policy, had the following to say about Apple’s commitment.

It’s safe and convenient to pay with your phone. Apple has pledged to allow competitors to access the ‘tap and go’ technology of iPhones. Today’s decision makes Apple’s commitments binding. This opens up competition in this crucial sector, by preventing Apple from excluding other mobile wallets from the iPhone ecosystem. From now on, competitors will be able to compete effectively with Apple Pay for mobile payments with the iPhone in stores. So that consumers will have a wider variety of secure and innovative mobile wallets to choose from.

source: EC

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