EU says Apple Pay anticompetitive, restricting rival mobile wallets

London: The European Commission on Monday announced that Apple has abused its dominant position in markets for mobile wallets on iOS devices with its payments service Apple Pay that excludes rivals from its mobile payment system.

In its preliminary ruling, the Commission said that by limiting access to a standard technology used for contactless payments with mobile devices in stores ('Near-Field Communication (NFC)' or 'tap and go'), Apple restricts competition in the mobile wallets market on iOS.

It took issue with the decision by Apple to prevent mobile wallets app developers from accessing the necessary hardware and software ('NFC input') on its devices, to the benefit of its own solution, Apple Pay.

"We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices," said Executive Vice President Margrethe Vestager, in charge of competition policy.

"In our 'Statement of Objections', we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay. If confirmed, such conduct would be illegal under our competition rules," Vestager added.

Apple Pay is Apple's own mobile wallet solution on iPhones and iPads, used to enable mobile payments in physical stores and online.

The commission said that Apple's iPhones, iPads and software form a "closed ecosystem".

"Apple controls every aspect of the user experience in this ecosystem, including mobile wallet developers' access to it. The Commission preliminarily considers that Apple enjoys significant market power in the market for smart mobile devices and a dominant position on mobile wallet markets," the ruling said.

In particular, Apple Pay is the only mobile wallet solution that may access the necessary NFC input on iOS. The NFC 'tap and go' technology is embedded on Apple mobile devices for payments in stores.

"Apple does not make it available to third-party app developers of mobile wallets," said the Commission.

The Commission's preliminary view is that Apple's dominant position in the market for mobile wallets on its operating system iOS, restricts competition, by reserving access to NFC technology to Apple Pay.

Apple was yet to comment on the EU preliminary ruling.