EU antitrust chief hints at possible Apple Pay investigation
Apple Pay's introduction into the payments market has led to multiple "expressions of concern," the EU Competition Commissioner Margrethe Vestager has revealed, with comments about Apple's mobile payments service potentially leading the European Commission to take a closer look at how competition in the market is affected by its presence.
Apple Pay has become a massive business for Apple as part of its Services arm, with it processing over 3 billion transactions in the September quarter, more than mainstay payment system PayPal. The massive growth of the platform has, as usual, drawn regulatory attention, with EU antitrust chief Vestager indicating complaints about it have started to arrive at her door.
"We've been asking quite a number of questions because we get many concerns when it comes to Apple Pay for pure competition reasons," Vestager revealed at a news briefing at Web Summit, reports Reuters. "People see it becomes increasingly difficult to compete in the market for easy payments."
Vestager has previously advised of the possibility of an examination of Apple Pay from an antitrust viewpoint, telling Reuters last year there is a possibility of an investigation into the platform if there were formal complaints.
According to one EU document, Vestager has also reportedly sought details from online retailers about their dealings with Apple Pay, including if they were told to use it instead of competitors.
Apple has argued that limiting access to the NFC chip provides tighter security, especially when handling sensitive banking data. They also argue that this is one of the reasons consumers choose Apple Pay in the first place. Banks and rival payment services have claimed the same restrictions make alternative payment services less attractive due to using other methods, such as barcodes and QR codes.
Vestager previously pointed out that other companies, such as Google and Samsung, have not triggered a probe. Smartphones running Android operating systems generally allow all payment apps access to the device's NFC chip.
Apple has taken efforts to start opening up NFC to third parties, such as for Germany's passport and ID card plans, and for the UK's Brexit app to function properly on iPhone.
In December 2018, Apple had settled a complaint with a Swiss payment company, TWINT, to avoid such a probe. Australian banks had also taken issue with Apple Pay for similar reasons, but ultimately resulted in them backing down and adopting Apple Pay support.
Apple is still in the midst of another anti-trust probe regarding their self-preferential practices, centered largely around their long-running spat with Spotify.
Apple Pay has become a massive business for Apple as part of its Services arm, with it processing over 3 billion transactions in the September quarter, more than mainstay payment system PayPal. The massive growth of the platform has, as usual, drawn regulatory attention, with EU antitrust chief Vestager indicating complaints about it have started to arrive at her door.
"We've been asking quite a number of questions because we get many concerns when it comes to Apple Pay for pure competition reasons," Vestager revealed at a news briefing at Web Summit, reports Reuters. "People see it becomes increasingly difficult to compete in the market for easy payments."
Vestager has previously advised of the possibility of an examination of Apple Pay from an antitrust viewpoint, telling Reuters last year there is a possibility of an investigation into the platform if there were formal complaints.
According to one EU document, Vestager has also reportedly sought details from online retailers about their dealings with Apple Pay, including if they were told to use it instead of competitors.
Apple has argued that limiting access to the NFC chip provides tighter security, especially when handling sensitive banking data. They also argue that this is one of the reasons consumers choose Apple Pay in the first place. Banks and rival payment services have claimed the same restrictions make alternative payment services less attractive due to using other methods, such as barcodes and QR codes.
Vestager previously pointed out that other companies, such as Google and Samsung, have not triggered a probe. Smartphones running Android operating systems generally allow all payment apps access to the device's NFC chip.
Apple has taken efforts to start opening up NFC to third parties, such as for Germany's passport and ID card plans, and for the UK's Brexit app to function properly on iPhone.
In December 2018, Apple had settled a complaint with a Swiss payment company, TWINT, to avoid such a probe. Australian banks had also taken issue with Apple Pay for similar reasons, but ultimately resulted in them backing down and adopting Apple Pay support.
Apple is still in the midst of another anti-trust probe regarding their self-preferential practices, centered largely around their long-running spat with Spotify.
Comments
Companies that develop products or services in a commercial environment have the right (and responsibility) to decide to make such products or services as closed or as open as they wish. Not only for their success as an commercial entity (and as a return on their enormous development, support, and marketing investments), but, in cases such as this, for concerns of user security. A company's decisions in all ways impact go-to-market risks - and inform the considerations of the consumer whether they want to purchase. In this case, too open and you invite potential security risk and lack of cohesive user experience - too closed, and you run the risk of alienating consumers and making it too difficult to use. If Apple has shown anything, it's that they get the blend of open and closed quite right far more often than they get it wrong. Its success is the penultimate marker for this. If one does not like Apple's (low) walled-garden approach, there are a multitude of Android alternatives one can move to. That's competition. Apple and everyone else out there have to continually compete, which seems to be forgotten by some. Competing means, among other things, offering differentiated features, sometimes exclusive, sometimes open, to make your mark. The consumers will decide if those offerings are of value or not. If too many people feel Apple Pay's approach is too limited, they won't use it. Or, if significant enough of a concern, they'll leave the platform.
Competition is one of those aspects and this might be a competition issue. The only way to know for sure is to investigate.
There is nothing disgusting about the position. There are rules and regulations. There are safeguards.
If Apple doesn't represent an abuse of competition regulations it has nothing to worry about. Simply being better or worse is irrelevant.
Competition is relevant.
By "competition" you mean companies who've copied Apple to the letter and release stolen designed knockoffs for profit off the back of Apples hard work. Cry elsewhere.
Also, that explains a few things...
I am waiting to hear from all the bozos who showed up some days ago, gnashed their pro-Vestager teeth, mumbled something along the likes of "they're only asking questions, what's the bid deal blah blah..."
I'll take longer vacation periods, greater consumer protections, WEEE, RoHS, common fisheries policy, universal health coverage, free movement etc, over almost any of the other options out there.
Everybody I have ever known from outside the EU has stated that they would love to live here. That is everyone without exception (including my Brexit voting brother who fell ill while staying with me and required health centre attention followed by emergency hospital attention and promptly changed his tune on that one).
For all its imperfections, people still want to live here.
I also have family in Brazil who live very privileged lives but within a 'security compound'. Even taxi drivers are vetted before entering. Living inside a bubble, for all the luxuries, doesn't do much for your quality of life at the end of the day. They visit the EU every single year.
Now you are not only repeating utterly absurd claims of 'copying to the letter', after having previously claimed that competitors had simply 'seen' Apple patents and rushed products to market, but now claim they 'stole Apple's designs'!
And all Apple's hard work was ripped off!
Fasten your seat belt because sooner or later you will wake up to harsh reality.
But what does all that have to do with the case at hand?
But as an economic policy that's problematic.
Our backyard, our rules. If you don't give a shit about anticompetitive behaviour, that's your problem.
We do. And if there's complaints or indication that this might be happening, then it's the Commission's job to investigate.
Nothing to see here. Europe will let you know how it pans out.
Apple invented the entire HW/SW platform. They have a responsibility to the business and to their customers to run it in such a way that it delivers the experiences those customers have demonstrated, (through enormous sales over several years) that they want.
If there is a security risk by opening NFC up, I DON'T WANT IT on my iPhone. I DON'T WANT Apple to waste resources being forced to try and support that, and then deal with the issues of security cracks that might develop from the forced adoption. It's the same reason I DON'T WANT third party app stores. My view of the Apple ecosystem would diminish greatly if they were compelled to offer this, because I PREFER the walled garden approach, and the vastly (relative) more stable and secure environment it provides. That remains a large part of my belief in the Apple ecosystem, as it undoubtedly does for a vast majority of consumers who remain with or are attracted to the ecosystem. Any governmental entity's attempt to forcibly changes this goes against the very people they are foolishly purporting to protect.
Apple can choose what they want on their platform for a myriad of reasons. The market will decide if they want to participate. Plenty of nice Android phones out there that compete with different features and options. Thats' exactly the choice you want - from natural competitive position, not governmental interference.
If I wanted the things Apple did not offer, if I felt constrained or forced, I can go to the store and buy something different that offers the things I feel I'm being denied.
One has every right to prefer socialism, but it's ironic one would desire to convert successful capitalistic ventures to meet a socialist framework!
Instead, look for the socialist-minded companies that deliver what you want. It would be an incredibly long and unfulfilling search...
Whats anti-competitive about Apple only offering Apple Pay on their own product? It's their hardware, it's their software, it's their total responsibility. Revenues, profits, development, support, marketing, user experience, PR, legal ramifications, (massive) etc...
If Apple somehow was interfering with other platforms offering their own payment systems on their own devices to "force" people to buy iPhones and force them to use Apple Pay, you'd have a discussion. Otherwise, you have nothing.