Remarks by Executive Vice-President Vestager on the decision to make binding commitments offered by Apple

Remarks by Executive Vice-President Vestager

Today, the Commission has decided to accept commitments offered by Apple. These commitments address our preliminary concerns that Apple may have illegally restricted competition for mobile wallets on iPhones.

Before I go into the commitments, I will describe our preliminary findings.

Apple has built a closed ecosystem around its devices and their operating systems.

And within this ecosystem, there are multiple markets for services. Among those services, are mobile payment apps - so-called ‘mobile wallets.'

Mobile wallets allow for payments with a mobile device, in shops and online. They also integrate other services, like loyalty cards, contactless tickets for events, boarding pass or digital identity credentials.

In the last years, mobile wallets have grown considerably. In Europe, the use of mobile wallets in shops has tripled over the last four years.

So, what did Apple do wrong?

In 2022, we raised concerns over Apple's conduct. We did that in relation to its own mobile wallet solution. Our preliminary finding was that Apple abused its dominant position by restricting access to the technology needed to make payments by iPhones.

In Europe, the most widely available technology for mobile payments in stores is called ‘Near Field Communication', or “NFC”. This technology enables wireless communication between a mobile phone and a store's payments terminal. It allows you to ‘tap and go' with your mobile phone.

NFC technology was not developed by Apple. It is a standardised technology. It is made available for free. Compared to other technologies, like payments using QR codes, it allows for the safest and most seamless mobile payment experience. It is the most widespread solution in the EU.

To develop viable mobile payment apps, access to NFC technology is therefore essential.

In our investigation, we came to three preliminary conclusions.

First, Apple holds a significant position in the market for smart mobile devices.

Second, Apple is dominant in the market for NFC functionalities and for mobile wallets for iPhones.

Third, Apple refused to give access to the NFC technology on the iPhone to rival wallet developers. Instead, Apple reserved the use of the NFC technology on the iPhone to its own mobile wallet solution.

Without access to the iPhone's NFC functionalities, competitors cannot reach Apple users. So, iPhone users can only pay with the ‘tap and go' function with Apple Pay. They cannot pay with other wallets.

This behaviour prevented developers from bringing new and competing mobile wallets to iPhone users.

By excluding others, Apple unfairly shielded its own mobile wallet from competition.

Our preliminary finding was therefore that Apple abused its dominant position by refusing to supply the NFC technology to competing mobile wallet developers.

By excluding competitors from the market, it may have had a negative impact on innovation. This reduction in choice and innovation is harmful. It is harmful to consumers and it is illegal under EU competition rules.

To address these concerns, Apple offered a set of commitments earlier this year.

Over the last months, we tested the package. We got feedback on whether the remedies could work. If they could address our concerns.

The issue raised a lot of interest. Many banks, app developers, card issuers, and financial associations gave us their feedback. We looked very carefully at those comments and asked Apple to improve their commitments. Then Apple offered improved remedies. And here we are today, making these remedies binding on Apple.

The commitments bring important changes to how Apple operates in Europe to the benefit of competitors and customers.

First, Apple commits to give access to NFC functionality to third-party mobile wallets. This access will be free of charge.

It will take place in what is called “Host Card Emulation mode”. This is a software solution that allows rival wallets to make secure NFC payments. Apple Pay, on the other hand, relies on access to the hardware “secure element” in the iPhone. We accept Apple's commitment because it offers an equivalent solution in terms of security and user experience. And it is easier to implement both for Apple and wallet developers. Indeed, other wallets already use this solution in an Android environment.

Second, Apple committed to enable access to important functionalities available on iPhones. This includes Double-Click and Face ID. iPhone users will be able to double-click the side button of their iPhones to launch their preferred payment application. Competing wallets will also be able to use Face ID, Touch ID and passcode to verify users' identities.

Third, Apple will also enable users to make the wallet of their choice the standard option on their iPhones. This is also known as setting the default option.

These commitments are applicable to users registered in the European Economic Area, including when they travel abroad.

And Apple will not prevent developers from combining NFC payments with other use cases, for instance transit cards, access control, concert tickets, digital identity credentials. Everything that you could have in a wallet.

Apple has until the 25^th of July to implement their commitments. As of this date, developers will be able to offer a mobile wallet on the iPhone with the same “tap and go” experience that so far has been reserved for Apple Pay.

The commitments would remain in force for ten years. Apple's compliance will be ensured by a monitoring trustee. And there will be a fast dispute resolution mechanism, which will also allow for an independent review of Apple's implementation.

Today's commitments end our Apple Pay investigation.

Thanks to these commitments, iPhone users will be able to use their preferred mobile wallet for payments in stores. They will be able to do so while enjoying all the iPhone's functionalities, including tap-and-go, Double-Click and FaceID.

Finally, the commitments will apply in parallel to Apple's obligations under other regulations.

The European Central Bank confirmed its support for these commitments. The commitments are without prejudice to further obligations that may apply under the digital euro, which will be regulated separately.

Apple also has obligations under the Digital Markets Act. Indeed, the DMA requires gatekeepers to ensure effective interoperability with hardware and software features that they use within their ecosystems. This includes access to NFC technology for mobile payments.

Today's decision therefore concerns business practices that are covered by the DMA: in-store payments with iPhone using NFC technology.

The commitments also bring more than what is required by the DMA. For instance, they include monitoring and dispute resolution mechanisms. We are looking forward to see the implementation in practice. These provisions will help us to do that.

This shows that antitrust enforcement goes hand in hand with the DMA.

From now on, Apple can no longer use its control over the iPhone ecosystem to keep other mobile wallets out of the market. Competing wallet developers, as well as consumers, will benefit from these changes, opening up innovation and choice, while keeping payments secure.

Thank you for your attention.