EU Apple suit alleges anticompetitive Apple Pay practices

The new investigation marks the fourth set of allegations leveled against Apple by the EU since 2020


It is set to be a contentious morning in Cupertino as Apple execs wake to the announcement of a new European Union investigation into anti-competitive practices. 

The European Commission is examining Apple Pay, particularly how the tech giant restricts access to hardware and software third-party digital wallet apps needed to enable near-field communication (NFC) technology, which is central to Apple Pay and third-party alternatives.

"We preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay. If confirmed, such a conduct would be illegal under our competition rules," said EC VP in charge of competition policy, Margrethe Vestager. 

The Commission points out that Apple Pay is the only mobile wallet solution on iOS that can access NFC Input, and Apple does not make it available to third parties. Because NFC is "standardized, available in almost all payment terminals in stores and allows for the safest and most seamless mobile payments," the Commission sees Apple's move as motivated by no other purpose than maintaining its market dominance.

The EU's operating document, the Treaty on the Functioning of the European Union (TFEU), has in its 102nd article a specific clause that prohibits companies with a dominant market position from abusing it. According to the EC, Article 102 can also be applied by national competition authorities, meaning any particularly angry governments could decide to duplicate the EC's suit at the national level. 

Actually, it's not that surprising

This is the fourth anticompetition action that the EU has taken against Apple since 2020. 

Previously, the Commission opened investigations into Apple's mandatory use of its own in-app purchases (IAPs) for music, and on the same day announced two separate investigations into Apple's rules requiring the use of its own IAP system for apps, and its control of Apple Pay. It's that last suit that includes today's Statement of Objections, which the Commission told The Register is its formal declaration to the company of what was found. 

Now it's Apple's turn to mount a defense, and it looks like the company is taking a page out of its Epic Games lawsuit to form its argument. Apple said its hard-line stance on app store payment processing and as much as 30 percent commissions weren't antitrust violations because alternative platforms are available, such as Android and Xbox game consoles.

An Apple spokesperson made much the same argument to The Register, saying that European users have plenty of NFC payment solutions available to them. Additionally, Apple told us that its lockdown of iOS devices' NFC antennas is what makes Apple Pay secure. 

Android devices, Apple told us, were flagged by Europol as susceptible to fraud because the NFC antenna was open to third-party devs. The report that Apple cited as evidence was issued in 2016. Android 10 added a feature called Secure NFC that moved NFC emulation into Android's secure element, which Apple told us is the same way its devices secure their NFC antennas. 

Apple also told The Register that it supports third-party payment apps, like PayPal, MobilePay in Denmark, Swish in Sweden, and Payconiq in Belgium. None of those apps support NFC payments on iOS devices, an instead must use a QR code.

"We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment," Apple said.

If Apple fails to defend itself against the European Commission's charges it may find itself facing a number it's quite familiar with: 30 percent, which is the maximum fine the EC can levy for anticompetitive practices, all of which is skimmed from revenues made by the offending products and services. ®


Other stories you might like

  • Quantum internet within grasp as scientists show off entanglement demo
    Teleportation of quantum information key to future secure data transfer

    Researchers in the Netherlands have shown they can transmit quantum information via an intermediary node, a feature necessary to make the so-called quantum internet possible.

    In recent years, scientists have argued that the quantum internet presents a more desirable network for transferring secure data, in addition to being necessary when connecting multiple quantum systems. All of this has been attracting investment from the US government, among others.

    Despite the promise, there are still vital elements missing for the creation of a functional quantum internet.

    Continue reading
  • Drone ship carrying yet more drones launches in China
    Zhuhai Cloud will carry 50 flying and diving machines it can control with minimal human assistance

    Chinese academics have christened an ocean research vessel that has a twist: it will sail the seas with a complement of aerial and ocean-going drones and no human crew.

    The Zhu Hai Yun, or Zhuhai Cloud, launched in Guangzhou after a year of construction. The 290-foot-long mothership can hit a top speed of 18 knots (about 20 miles per hour) and will carry 50 flying, surface, and submersible drones that launch and self-recover autonomously. 

    According to this blurb from the shipbuilder behind its construction, the Cloud will also be equipped with a variety of additional observational instruments "which can be deployed in batches in the target sea area, and carry out task-oriented adaptive networking to achieve three-dimensional view of specific targets." Most of the ship is an open deck where flying drones can land and be stored. The ship is also equipped with launch and recovery equipment for its aquatic craft. 

    Continue reading
  • Experts: AI should be recognized as inventors in patent law
    Plus: Police release deepfake of murdered teen in cold case, and more

    In-brief Governments around the world should pass intellectual property laws that grant rights to AI systems, two academics at the University of New South Wales in Australia argued.

    Alexandra George, and Toby Walsh, professors of law and AI, respectively, believe failing to recognize machines as inventors could have long-lasting impacts on economies and societies. 

    "If courts and governments decide that AI-made inventions cannot be patented, the implications could be huge," they wrote in a comment article published in Nature. "Funders and businesses would be less incentivized to pursue useful research using AI inventors when a return on their investment could be limited. Society could miss out on the development of worthwhile and life-saving inventions."

    Continue reading
  • SEC probes Musk for not properly disclosing Twitter stake
    Meanwhile, social network's board rejects resignation of one its directors

    America's financial watchdog is investigating whether Elon Musk adequately disclosed his purchase of Twitter shares last month, just as his bid to take over the social media company hangs in the balance. 

    A letter [PDF] from the SEC addressed to the tech billionaire said he "[did] not appear" to have filed the proper form detailing his 9.2 percent stake in Twitter "required 10 days from the date of acquisition," and asked him to provide more information. Musk's shares made him one of Twitter's largest shareholders. The letter is dated April 4, and was shared this week by the regulator.

    Musk quickly moved to try and buy the whole company outright in a deal initially worth over $44 billion. Musk sold a chunk of his shares in Tesla worth $8.4 billion and bagged another $7.14 billion from investors to help finance the $21 billion he promised to put forward for the deal. The remaining $25.5 billion bill was secured via debt financing by Morgan Stanley, Bank of America, Barclays, and others. But the takeover is not going smoothly.

    Continue reading
  • Cloud security unicorn cuts 20% of staff after raising $1.3b
    Time to play blame bingo: Markets? Profits? Too much growth? Russia? Space aliens?

    Cloud security company Lacework has laid off 20 percent of its employees, just months after two record-breaking funding rounds pushed its valuation to $8.3 billion.

    A spokesperson wouldn't confirm the total number of employees affected, though told The Register that the "widely speculated number on Twitter is a significant overestimate."

    The company, as of March, counted more than 1,000 employees, which would push the jobs lost above 200. And the widely reported number on Twitter is about 300 employees. The biz, based in Silicon Valley, was founded in 2015.

    Continue reading
  • Talos names eight deadly sins in widely used industrial software
    Entire swaths of gear relies on vulnerability-laden Open Automation Software (OAS)

    A researcher at Cisco's Talos threat intelligence team found eight vulnerabilities in the Open Automation Software (OAS) platform that, if exploited, could enable a bad actor to access a device and run code on a targeted system.

    The OAS platform is widely used by a range of industrial enterprises, essentially facilitating the transfer of data within an IT environment between hardware and software and playing a central role in organizations' industrial Internet of Things (IIoT) efforts. It touches a range of devices, including PLCs and OPCs and IoT devices, as well as custom applications and APIs, databases and edge systems.

    Companies like Volvo, General Dynamics, JBT Aerotech and wind-turbine maker AES are among the users of the OAS platform.

    Continue reading
  • Despite global uncertainty, $500m hit doesn't rattle Nvidia execs
    CEO acknowledges impact of war, pandemic but says fundamentals ‘are really good’

    Nvidia is expecting a $500 million hit to its global datacenter and consumer business in the second quarter due to COVID lockdowns in China and Russia's invasion of Ukraine. Despite those and other macroeconomic concerns, executives are still optimistic about future prospects.

    "The full impact and duration of the war in Ukraine and COVID lockdowns in China is difficult to predict. However, the impact of our technology and our market opportunities remain unchanged," said Jensen Huang, Nvidia's CEO and co-founder, during the company's first-quarter earnings call.

    Those two statements might sound a little contradictory, including to some investors, particularly following the stock selloff yesterday after concerns over Russia and China prompted Nvidia to issue lower-than-expected guidance for second-quarter revenue.

    Continue reading
  • Another AI supercomputer from HPE: Champollion lands in France
    That's the second in a week following similar system in Munich also aimed at researchers

    HPE is lifting the lid on a new AI supercomputer – the second this week – aimed at building and training larger machine learning models to underpin research.

    Based at HPE's Center of Excellence in Grenoble, France, the new supercomputer is to be named Champollion after the French scholar who made advances in deciphering Egyptian hieroglyphs in the 19th century. It was built in partnership with Nvidia using AMD-based Apollo computer nodes fitted with Nvidia's A100 GPUs.

    Champollion brings together HPC and purpose-built AI technologies to train machine learning models at scale and unlock results faster, HPE said. HPE already provides HPC and AI resources from its Grenoble facilities for customers, and the broader research community to access, and said it plans to provide access to Champollion for scientists and engineers globally to accelerate testing of their AI models and research.

    Continue reading

Biting the hand that feeds IT © 1998–2022