EU regulators query retailers over Apple Pay antitrust concerns

AppleInsider

In a bid to determine whether Apple's mobile payments strategy runs afoul of European Union laws, antitrust regulators earlier this year asked participating retailers to fill out a questionnaire regarding Apple Pay terms and conditions, according to a report on Tuesday.

In a document disseminated to online retailers in August, the European Commission said it had information that Apple potentially breached EU antitrust rules by restricting or conditioning the use of online payment options in apps and on websites, Reuters reports.

Retailers were asked whether they were under a contractual obligation to enable certain payment methods and if said contracts included conditions for integrating Apple Pay, the report said. Further, the questionnaire inquired whether certain apps were rejected for failing to comply with Apple Pay terms and conditions.

Today's revelations add background to a report in October that claimed the Commission was actively gathering information about Apple Pay as it weighed a formal investigation into the matter. The probe in part takes issue with Apple's decision to restrict third-party access to iPhone's NFC chip, a strategy that precludes use of other payment methods.

The EU confirmed it was assessing the situation in a statement to Reuters.

"The Commission is actively monitoring the development of mobile payment solutions, the behavior by operators active in the payments sector, including mobile payments," the EU watchdog said.

For its part, Apple argues that the iPhone's NFC module is locked down for security reasons. The company consistently touts Apple Pay as the safest mobile payments platform available, claims it can only make by "owning," or facilitating, the entire stack of mobile hardware and software components.

Apple faced similar scrutiny over Apple Pay practices when the service launched in Australia in 2015. At the time, a bloc of major banks sought approval to collectively boycott Apple Pay for a chance to negotiate the installation of third-party software on iPhone hardware, a move it argued would foster increased competition and consumer choice. The banks caved and began to integrate Apple's solution after the Australian Competition and Consumer Commission denied their boycott request in 2017.

anantksundaram

Payments? Payments?! PAYMENTS?! These EU bureaucrats are a bunch of know-nothing, can’t-innovate-for-crap, inferiority-complex-ridden lotus-eaters, constantly out to penalize American ingenuity because their own tech industry is an agglomeration of clueless buffoons. Pathetic. 

The US should start to hit back hard. Enough is enough.

chaicka

Just look at where and how most breaches happened historically.

• Magnetic strips being easily clone by a small device used to swipe the credit card under the cashier top.
• Embedded chips (earlier version) being clone despite encryption.
• RF (e.g. PayWave) being subject to fraud transaction simply by having someone with a transactional device standing besides you in a crowded place.

Hope these regulators all over the world stop their hidden agenda (which is not out to advance and enhance our lives) and take away the only safer transaction option we now have after decades of credit thefts/frauds.

Where were these regulators when Nokia was the largest marketshare and everything is closed-door on their ecosystem back then?

n2itivguy

Edit: Sorry, wrong article. 🤷🏾‍♂️

apple ][

The EU can kiss my butt. They're a bunch of bureaucratic, talentless primates.

I think that we should go to war with them soon. Not a dropping bombs, let's kill 'em all war, not yet at least, but an economic and trade war, let's turn the dials up a bit, and hit 'em hard and hit 'em good.

cy_starkman

such angry comments, as if people were being personally damaged by this.

my only question is what is all this about retailer agreements. apple pay can be used on any tap to pay system anywhere, in any shop.

my local privately owned corner store does not have an agreement with apple.

coolfactor

anantksundaram said:

Payments? Payments?! PAYMENTS?! These EU bureaucrats are a bunch of know-nothing, can’t-innovate-for-crap, inferiority-complex-ridden lotus-eaters, constantly out to penalize American ingenuity because their own tech industry is an agglomeration of clueless buffoons. Pathetic. 

The US should start to hit back hard. Enough is enough.

Smartcards (what we call chip+pin cards these days) were used in Europe decades before they were used here in North America. Many countries, not just the US, contributed towards the adopting of smartcard technology.

seanismorris

It’s a questionnaire people, don’t have a heart attack.  The EU has regulations, the US has regulations... usually the best place to find out if there are violations is asking around.  

I’m sure Apple did it’s due diligence before expanding Apple Pay into the EU.  

lkrupp

seanismorris said:

It’s a questionnaire people, don’t have a heart attack.  The EU has regulations, the US has regulations... usually the best place to find out if there are violations is asking around.  

I’m sure Apple did it’s due diligence before expanding Apple Pay into the EU.  

Doesn’t matter if Apple did its due diligence, the EU is a blood sucking vampire out to soak every American company it can. If they can’t find a law or regulation that lets them squeeze money out of Apple they’ll create one on the spot so they can. The Brits are smart in getting out of that shit hole.

anantksundaram

coolfactor said:

anantksundaram said:

Payments? Payments?! PAYMENTS?! These EU bureaucrats are a bunch of know-nothing, can’t-innovate-for-crap, inferiority-complex-ridden lotus-eaters, constantly out to penalize American ingenuity because their own tech industry is an agglomeration of clueless buffoons. Pathetic. 

The US should start to hit back hard. Enough is enough.

Smartcards (what we call chip+pin cards these days) were used in Europe decades before they were used here in North America. Many countries, not just the US, contributed towards the adopting of smartcard technology.

Leaving aside the question of whether chip & pin amounts to a ‘smart’ card, you’re basically saying there’s lots of competition then. Apple’s apparently just a recent entrant and a follower. 

So, what’s the actual — or even potential — antitrust issue then?

chaicka

cy_starkman said:

such angry comments, as if people were being personally damaged by this.

my only question is what is all this about retailer agreements. apple pay can be used on any tap to pay system anywhere, in any shop.

my local privately owned corner store does not have an agreement with apple.

Indeed for retails/commercials, the agreements should be with transaction processing houses/banks. The commercial clients I have just confirmed that as well. I believe as the article wrote, it is about online stores and apps which I believe is a different landscape from the usual commercial (physical) ones which they sign up agreements with banks or transaction processing houses.

bonobob

anantksundaram said:

Leaving aside the question of whether chip & pin amounts to a ‘smart’ card, you’re basically saying there’s lots of competition then. Apple’s apparently just a recent entrant and a follower. 

So, what’s the actual — or even potential — antitrust issue then?

Using NFC, Google can't run Google pay on an iPhone, Samsung can't run Samsung Pay on an iPhone, etc.

sunman42

anantksundaram said:

Payments? Payments?! PAYMENTS?! These EU bureaucrats are a bunch of know-nothing, can’t-innovate-for-crap, inferiority-complex-ridden lotus-eaters, constantly out to penalize American ingenuity because their own tech industry is an agglomeration of clueless buffoons. Pathetic. 

The US should start to hit back hard. Enough is enough.

Well, that was a dandy piece of jingoism; I haven't heard the like since some orange bozo last tweeted. I know people in the European tech sector, I use software written by people there, and they are sharp as tacks. It's entrepreneurism that's continually strangles, not just by the rules coming out of Brussels, but by national governments run by technocrats who know nothing about promoting small businesses (while remaining on the take of large, domestic ones). And really, Apple, Google, Facebook and the rest have the money to hire European attorneys, just as they hire US ones, to keep them abreast of local and continent-wide legislation. (Where Apple's tax lawyers failed was in assuming that the EU would let them get away with a sweet tax deal in ireland; let's hope they're currently better advised in antitrust matters.)

WoodsofEagleCreek

Like it when bunch of keyboard warriors are all over the EU when they merely send over questionnaires. And yeah, hardly anywhere in the developed world is as regulation-heavy and has arms as long-reaching as the U.S regime, USG agencies can go after your ass when you are doing your business only in your own nation(not the U.S), but with American customers.

avon b7

There are a fair amount of completely baseless anti EU comments here.

The EU is making enquiries about a possible anti competition case. It os consulting the field.

It has an obligation to promote competition and look into potential abuses.

The notion that it is anti U.S is just silly and I can assure that the people making those claims can't back them up with anything.

The rules are the rules. Just ask Siemens:

https://europa.eu/rapid/press-release_IP-19-881_en.htm

beowulfschmidt

seanismorris said:

It’s a questionnaire people, don’t have a heart attack.  The EU has regulations, the US has regulations... usually the best place to find out if there are violations is asking around.  

I’m sure Apple did it’s due diligence before expanding Apple Pay into the EU.  

While it's true that it's "just a questionnaire", I'd like to see the actual questions asked, verbatim.  It would not surprise me in the least if they turned out to be the leading sort of question that will let the questioner interpret the answers in a manner favorable to justifying the pursuit of investigations.

anantksundaram

bonobob said:

anantksundaram said:

Leaving aside the question of whether chip & pin amounts to a ‘smart’ card, you’re basically saying there’s lots of competition then. Apple’s apparently just a recent entrant and a follower. 

So, what’s the actual — or even potential — antitrust issue then?

Using NFC, Google can't run Google pay on an iPhone, Samsung can't run Samsung Pay on an iPhone, etc.

Total straw man. Google could easily create an interface to work via Apple Wallet just as anyone else (incl. Apple with its card) can (and does). 

Of course they won’t, since Apple’s chip won’t give them access to any user data. 

gatorguy

anantksundaram said:

bonobob said:

anantksundaram said:

Leaving aside the question of whether chip & pin amounts to a ‘smart’ card, you’re basically saying there’s lots of competition then. Apple’s apparently just a recent entrant and a follower. 

So, what’s the actual — or even potential — antitrust issue then?

Using NFC, Google can't run Google pay on an iPhone, Samsung can't run Samsung Pay on an iPhone, etc.

Total straw man. Google can create an an interface to work via Apple Wallet just as anyone else (incl Apple with its card) can. 

Of course they won’t, since Apple’s chip won’t give them any data. 

Huh?
https://www.thebalance.com/how-to-set-up-google-wallet-for-android-and-ios-1293991
But it won't work for tap and pay. AFAIK Apple won't allow 3rd parties. 

anantksundaram

avon b7 said:

The notion that it is anti U.S is just silly and I can assure that the people making those claims can't back them up with anything.

Taken in context with what has been happening in the past few years, no, it's not silly at all.

Moreover, it's time for someone to call out the EU with its "respond to company whines" as opposed to "respond to actual customer complaints" approach to antitrust. The latter is the real purpose of antitrust law. Right now, it appears to be held hostage to lobbying by companies in Brussels.

crowley

anantksundaram said:

bonobob said:

anantksundaram said:

Leaving aside the question of whether chip & pin amounts to a ‘smart’ card, you’re basically saying there’s lots of competition then. Apple’s apparently just a recent entrant and a follower. 

So, what’s the actual — or even potential — antitrust issue then?

Using NFC, Google can't run Google pay on an iPhone, Samsung can't run Samsung Pay on an iPhone, etc.

Total straw man. Google can create an an interface to work via Apple Wallet just as anyone else (incl Apple with its card) can. 

Of course they won’t, since Apple’s chip won’t give them any data. 

Can they?  I thought third party Apple Wallet cards couldn't use NFC, that's why they have QR codes or barcodes on them.  Since point of sale devices in the EU (near) universally accept contactless via NFC and don't accept QR or barcodes for payments, then there is a pretty clear case of Apple using its competitive advantage as the hardware and system software provider to enhance its own Apple Pay offering ahead of its competitors.  Given iPhone doesn't have a majority market share its arguable over whether that constitutes enough to warrant regulatory action, but there appears to me to be little argument that it's an anti-competitive behaviour, even if security is a prominent reason in Apple's design thinking.

aaarrrgggh

I don’t think there is anything that Apple really did wrong with ApplePay, and am curious why they would survey retailers rather than financial institutions— they are the ones that are “injured” by not allowing direct NFC access.

That said, I think the AppleCard is what will be the biggest challenge for Apple with EU rules; it puts their competitors at a disadvantage to not have that same level of integration into the Wallet, and I could see that becoming a problem.