Apple faces antitrust charges over NFC chip and App Store payment rules
In recent times, Apple has changed some of its policies and slowly opened up its walled garden. This change came after the company was hit with several antitrust lawsuits. iOS 14, for example, added support for assigning certain third-party default apps, such as email. iOS 15, unexpectedly, allows Android and Windows users to use FaceTime. However, Apple still has some anti-competitive policies, and the latest antitrust lawsuits target two such policies — NFC restrictions and App Store payment rules.
NFC chip and Apple Pay lawsuit
As per a Reuters report, Apple will soon face an EU antitrust lawsuit over its NFC chips and how restricted they are. Apple Pay currently takes full advantage of NFC capabilities on iPhones and Apple Watches. However, rivals don’t get access to the same privileges. The report states:
The European Commission has since narrowed its focus to just the NFC chip, which can only be accessed by Apple Pay, one of the sources said. The EU competition enforcer is now preparing a charge sheet known as a statement of objections, which could be sent to Apple next year, one of the sources said. Such documents typically set out practices considered anti-competitive by the regulator.
The Commission, which has three other cases against Apple, declined to comment. It can fine companies up to 10% of their global turnover for violating EU rules, which based on Apple’s 2020 revenue could come to $27.4 billion.
Apple argues that its Apple Pay policies are for safety and privacy reasons, but it hasn’t commented on the matter just yet.
App Store payment rules lawsuit
Another report from Reuters states that the Dutch watchdog finds Apple’s App Store payment rules anti-competitive. Apple currently charges developers a 15-30% commission on purchases made through the App Store or their in-app purchases (IAP) system. The Cupertino tech giant bans developers from implementing their own payment systems inside apps published on the App Store. This restricts developers and forces them to resort to the relatively overpriced Apple IAP system.
The report shares what laws other governments have implemented that Apple has to abide by:
The European Commission launched an investigation in 2020 parallel to the Dutch probe, but focused on whether app store rules favour Apple apps when there are competing products, such as Apple Music versus Spotify.
A U.S. judge last month ordered Apple to make it easier for apps to promote alternative payment systems. Plaintiff Epic Games, the maker of “Fortnite”, is appealing, saying the decision does not go far enough.
South Korea has enacted a law barring app store operators from forcing developers to use their official payment systems. Apple and Google are due to respond this month on how they will comply.
In Japan, Apple settled an antitrust probe by agreeing to allow some music, video and e-book apps, notably Netflix, to promote purchase options outside their apps.
It’s yet to be seen how these lawsuits will be settled, but it appears that Apple is about to get its waters stirred. Payment platforms have already started promoting their upcoming alternative IAP systems for iOS, following the recent court ruling in the Epic Games vs. Apple case.
Would you use Google Pay or similar services if Apple is forced to let developers take full advantage of the NFC chip? Let us know in the comments section below.