Contactless payment: Apple’s closed ecosystem again targeted by the EU

Earlier this week, the European Commission accused Apple of holding back competition in the mobile contactless payment market, allowing only its Apple Pay tool to access its NFC chip, present on all its iPhones and necessary to carry out this Transaction Type. All this to the detriment of other systems, such as Google Pay, Samsung Pay, or even Paylib (supported by a group of French banks). An investigation had been open on this file since 2020. This week, Brussels simply informed Apple in writing of the grievances against it, allowing it to respond to them.

The case is reminiscent of another. Just a year ago, the European Union already considered that the American giant Apple was distorting competition, this time on the online music market, by favoring its Apple Music application, in particular at the expense of Spotify, which filed a complaint.

The scale is a bit different for one of the world’s biggest smartphone sellers, though. “Contactless by mobile represents the future of payment, comments to L’Express Marin Delattre, consultant at Sia-Partners and specialized in the banking field. It is a sector in strong growth, which has become very strategic, and in which new players are investing. Europe cannot therefore risk letting Apple obtain a monopoly in such an important market.”

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For the moment, Apple has advanced its pawns there in peace. In 2020, according to AB Bernstein, a financial company quoted by The EconomistApple Pay alone accounted for around 5% of global card transactions and expected to reach 10% by 2025.

An opening of its NFC chip could reduce this share. But Apple can be reassured: the company has already established partnerships with around 2,500 European banks, all of which pay fees to use its NFC chip, reports Bloomberg. For its competitors, the damage is done.

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The investigation of the European Union remains bad news for the firm at the apple. “Apple’s defense arguments, and in particular that of the security of its devices, have not been deemed convincing for the moment,” said Marin Delattre. “According to Apple, the security risks would increase if access is granted to third parties. Our investigation so far has not revealed any evidence that would indicate such an increased security risk. of our record indicate that Apple’s conduct cannot be justified by security concerns,” the European Union said.

“Even though iOS, Apple’s mobile operating system, only represents around 25% of the market share in Europe, Apple is already very strong in the mobile payment market. And since it is the only company to impose strong restrictions on its system, there are, in my opinion, only two possible outcomes in this case: an agreement resulting in the relaxation of the rules of Apple, or an EU sanction “, continues Marin Delattre. Abuse of a dominant position can lead to a fine of up to 10% of the company’s turnover.

Finally, this survey takes place in a particular context: that of the advent of the Digital Markets Act (DMA), presented at the end of March by the European Union. This text aims more broadly at large technology companies to open their platforms to competition. But Apple seems to be a prime target. The company headed by Tim Cook “has built a closed ecosystem around its devices and its iOS operating system. Apple controls the gates of this ecosystem, setting the rules of the game for everyone”, lamented Margrethe Vestager again this week. , the European Commissioner for Competition.

If nothing is done, the DMA could eventually force Apple to let its users download applications without going through its own online store, the App Store. A practice, “sideloading”, which would undermine the entire economic model of the apple company, already weakened by the complaint from Epic Games, last year, against the 30% commissions imposed on subscriptions and downloads to that same app store. Apple then adapted as best it could, letting paid apps direct users to their sites, outside the iPhone’s online store, thus avoiding said commission.

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That’s not all. The European Union has also taken the fight against Apple to the hardware, equipment. On the one hand by legislating for the standardization of chargers according to the USB-C standard. The Cupertino-based company has so far offered its own “Lightning” cables. On the other hand by positioning itself for the right to repair devices. Across the Atlantic, this same aspiration has already pushed Apple to offer its American customers “repair kits”, in order to open their iPhones and MacBooks themselves. In short, fronts are piling up for Apple. Europe is more than ever at war against its closed ecosystem. The same that helped make Apple the most valuable company in the world.


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