EU Commission Apple Payments investigation

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European regulators have accused Apple of abusing its dominant position to restrict competitors’ ability to access the digital wallet technology behind Apple Pay, a move that potentially exposes it to significant fines.

In a “statement of objections”, which represents a preliminary conclusion of an investigation, published on Monday, the European Commission said that Apple had tried to restrict the “tap and go” technology which plays a major role in its success in mobile wallets – a fast- growing segment of the economy.

The global mobile payment market, which was valued at nearly $1.8 billion in 2021, is expected to exceed $6 billion over the next five years, according to The explosive growth reflects the rise of online shopping, driven by advances in technology, in an area that includes PayPal, Mastercard, Google Wallet and other digital financial service providers. Apple Pay claimed over 500 million users in 2020, but some consumer studies have suggested assets use rate are weak.

European antitrust chief Margrethe Vestager said Apple may have blocked third parties from accessing key technology needed to develop mobile wallet alternatives for its devices.

“Apple may have restricted competition, in favor of its own Apple Pay solution,” Vestager said in a statement. “If confirmed, such conduct would be unlawful under our competition rules.”

Apple said its mobile payments platform facilitates “a very small fraction of transactions in Europe” and is “just one of many options available to European consumers for making payments” in an emailed statement. email to The Post.

The Cupertino, Calif.-based company said it had “ensured equal access” to the technology in question while “setting industry-leading standards for privacy and security.” Apple said many other mobile payment options have “found success on iOS”, from PayPal to European alternatives such as MobilePay, Swish and Payconiq.

“We will continue to engage with the Commission to ensure European consumers have access to their payment option of choice in a safe and secure environment,” Apple said in the statement.

The complaint described Monday stems from an investigation that dates back to 2020. Apple may submit a written response or request a closed hearing before a final judgment is announced. He could face fines of up to 10% of his earnings.

Last week, Apple reported a record revenue of $97.3 billion in its second fiscal quarter, up 9% year-on-year. The most valuable company in the world, with a market capitalization of more than $2.5 trillionApple earned more than $378 billion in revenue in 2021.

The move comes as Europe takes the reins of regulating the digital economy, with the landmark Digital Services Act coming into force next year. The legislation imposes new transparency obligations on companies, requiring them to provide information to regulators and outside researchers about the operation of the algorithms that control what people see on their sites. It also creates new regulations on how companies target online advertisements.

The law also includes the Digital Markets Act, a competition bill that would set new rules to prevent “gatekeepers” from abusing their power to crush smaller rivals.

Rasmus Andresen, a member of the European Parliament and shadow rapporteur on the bill, applauded the EU’s complaint, but said it showed how necessary the Digital Markets Act was.

“Instead of lengthy investigations, we need the new rules implemented quickly,” Andresen said in a statement. “Going forward, DMA will make it illegal to keep app developers out of stores if they don’t accept certain payment systems.”

US lawmakers have yet to advance comprehensive legislation despite years of promises to clamp down on Big Tech, while giants such as Apple, Google, Facebook and Amazon have amassed power and influence with minimal surveillance. (Amazon founder Jeff Bezos owns The Washington Post.)

Now regulators in the EU, which passed its historic first privacy law five years ago, are leading the way. The recent agreement on the Digital Services Act in Europe could change the tenor of the regulatory debate in the United States.

While investors don’t seem overly concerned about the risk, it will increase over time for tech giants, according to Dan Ives, managing director of Wedbush Securities.

“The EU continues to hit the bull’s-eye on the stalwarts of Big Tech,” Ives told the Post in an email. “This antitrust accusation by Apple is another overhang that speaks to this long battle between the EU and Big Tech that is touching another chapter, as it clearly isn’t ending anytime soon.”

Europe to Impose New Big Tech Regulations, Beating the US to the Fist

Apple has already found itself in the crosshairs of the European Commission. Last spring, the regulator accused it of using its App Store rules to disadvantage music streaming rivals.

The European Commission has made similar accusations against Google, which is currently fighting against 1.5 billion euros fine following discoveries, he abused his dominance in online advertising for about a decade. Last year, Google lost a battle in Europe over fines exceeding 2.4 billion euros after an investigation into its comparison shopping service.

In September, Europe’s second-highest court will rule on Google’s appeal against a record 4.3 billion euro fine imposed for anti-competitive practices with its Android operating system, after a four-year legal battle.


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