EU targets Apple Pay, threatens $36B fine

From Javier Espinosa's "Apple charged by Brussels with abusing its market power in mobile payments" ($) posted Monday by the Financial Times:

Brussels regulators have charged Apple with breaking EU competition law by abusing its dominant position in mobile payments to limit rivals’ access to contactless technology.

Antitrust investigators are concerned that the US tech group is preventing competitors from accessing “tap and go” chips or near-field communication (NFC) to benefit its own Apple Pay system, the European Commission said in a statement on Monday.

Margrethe Vestager, the EU’s executive vice-president in charge of competition policy, said Brussels had “indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices”.

She added that the commission had “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”, Vestager said. The company could face fines worth up to 10 per cent of global turnover if the charges are upheld.

My take: This is the latest move in Vestager's campaign to dismantle Apple's walled garden one brick at a time. This one has teeth. Apple's global turnover, as the Europeans call gross revenue, was $365.82 billion in fiscal 2021. Ten percent of that is real money.

20 Comments

  1. Alan Trerise said:
    Ms. Vestager’s behavior is bordering on harassment. Nearly every credit card today supports “tap to pay.” Apple hardly has, or even guaranteed to have, a dominate market position in the capability. Just because it is embedded in a programmable device does not imply it should now be open to all comers.

    3
    May 2, 2022
  2. Neal Guttenberg said:
    I couldn’t read the article since it was behind a paywall. The question that I have is what is Apple’s legal liability in this case? Does the EU have a real case? Or are the EU regulators just being a pain the rear in order to try to get Apple to open things up? Or a combination of the two? As a shareholder, I would like to think the EU is just being a pain. But I don’t have any expertise here would like to hear other opinions.

    1
    May 2, 2022
  3. Daniel Epstein said:
    Hard to believe the EU will lead with the fine at 10% of worldwide revenue based on what they are accusing Apple of doing but you never know. Likely an overreach especially if the law hasn’t been formally adopted and the accusations are interpretations of what Apple should allow on its own devices. What does Apple in this case do that is different than other platform providers? Does the EU mandate that Apple has to allow anyone to have access to technology that Apple puts into the phone. Apparently that is the argument.

    3
    May 2, 2022
  4. Fred Stein said:
    Magrethe is a 2 year that really sees a monster under her bed.

    Meanwhile, her parents shield her from the trillions of EU of global financial fraud perpetrated upon connected users, most of whom don’t have the means to defend themselves. The same applies to abuse of social media by bullies, high-schoolers or power-mad dictators.

    Much the abuses on the internet can be traced to “open” or “free” which usually means users pay with information about themselves and they have no idea what others do with it.

    7
    May 2, 2022
  5. John Konopka said:
    The sleight of hand she is performing is to pick a small feature of the iPhone and attach it to Apple’s total WW revenue. If they are concerned about ApplePay then they should break out the revenue fraction due to ApplePay and then fine Apple a fraction of that, if that is their intention. If they are concerned about the App Store they should break out just the revenue from that if they intend to levy fines for some imagined abuse of the App Store.

    8
    May 2, 2022
  6. Deep within Apple‘s Developer Human Interface Guidelines you’ll find this statement:
    “Core NFC doesn’t support payment-related Application IDs.” Supposedly this helps retailers & customers through lower transaction fees.
    Otherwise Apple heartily encourages developers to use NFC, for reading & writing NFC tags, everything except payments. Walmart, Carrefour and Waitrose don’t allow other retailers to sell stuff using NFC in their markets either, but overzealous EU regulators miss that obvious comparison.
    Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits abuse of a dominant market position. Apparently Russia & Saudi Arabia are exempted from Article 102. Who’s damaging core European interests here? Who’s transferring € millions to EU-based developers each month?

    3
    May 2, 2022
  7. Robert Paul Leitao said:
    Wait a minute! This story is much about Margrethe Vestager! Where’s Michael Goldfeder! He’s usually on this right away! Do we have to issue a BOLO through the global Apple community to find him? I’m concerned he hasn’t commented yet!

    1
    May 2, 2022
  8. Rick Povich said:
    Looks to me that there is competition from PayPal, Google, Samsung, Walmart and “Other” as described in the earlier post about Evercore taking a deep dive. Which among those is an injured party Is it someone in the “Other” category? WalMart wont allow ApplePay in its stores. PayPal doesn’t have any system like Apple’s, so what’s vastager’s beef? She’s just a Socialist in the Bureaucrat State trying to control everything. As with everything Apple, the company just does things better and more efficiently and safely than other companies. EU can’t stand it. Next she’ll be whining that you can’t install Android on an Apple device .

    3
    May 2, 2022
    • Greg Lippert said:
      Android on an iPhone, thats coming as her next demand!

      3
      May 2, 2022
    • Alan Birnbaum said:
      Don’t give her any ‘ideas’ ….. /s

      4
      May 2, 2022
  9. Aaron Belich said:
    Whatever… keep letting Apple buy the dip.

    0
    May 2, 2022
  10. Michael Goldfeder said:
    Margrethe Vestager, the gift that keeps giving. She needs to be regifted to another dimension! I’m thinking H.G. Wells “The Time Machine” could cart her off in that well upholstered device and deliver her to the world of the future starring the “Eloi” as she would fit right in with them. The ultimate do nothing culture where she would slime right in like a gastropod snail in a shell. Actually, my hope is that when Rod Taylor sees both Margrethe and Weena struggling to survive in the swift waters, that he wisely chooses to save only one of them. Two vintage Europeans yet only one proper choice.

    Tim Cook and Apple ought to seriously consider seeking a Restraining Order against Vestager. Once the European high court makes its ruling in the Ireland/Apple tax case, I’m certain that she will instantly seek the unilateral authority to have Ireland excluded from the EU, disbanded as a sovereign nation, and expelled for partnering with Apple. If ever there has been a regulator who foments such overt bias toward a company with outlandish hostility, she takes the top prize as there is no second place finisher.

    Her brazen comments just reek with contempt: ” Brussels had “indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices.”, and “She added that the commission had “preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay.” Duh! Build a better mousetrap!

    “If confirmed, “such a conduct would be illegal under our competition rules”, Vestager said.” As if there’s any doubt as to the edicts pronounced by this regulatory fiat! She won’t be satisfied until Spotify is the default music platform on iOS and all Dutch dating sites are free to upload malware on iPhones all over the EU, if not the entire world.

    “Success is not illegal!” Although in the myopic world of Vestager, who still hasn’t gotten over biting into an apple at a young age only to discover half a worm, she’s on a crusade of sorts that makes Don Quixote tilting at windmills look like a Marvel Superhero by comparison. I shudder to envision her next anti-Apple strategic move. Perhaps there exists some obscure European pager company still on life support that she can take up its cause and blame their unfortunate demise solely at the hands of Apple and Tim Cook for another $36 Bazillion fine!

    I’m certain that the rock from where she crawled out from under many years ago has since successfully camouflaged itself with moss and lichens and relocated elsewhere on another continent so that she may never go home. Hence, H.G. Wells is our last remaining and best hope! An awesome European BTW!

    2
    May 2, 2022
    • Robert Paul Leitao said:
      Thanks, Michael! We found you or you found us. We canceled the BOLO!

      0
      May 2, 2022
      • Michael Goldfeder said:
        The demands of the day job have me hopping. But rest assured if there’s another Vestager or Khan article on the platform I’ll step up ASAP! Thanks for the BOLO and its subsequent cancellation. Looking forward to the day there’s a BOLO on these two with a subsequent photograph on every milk, oat, rice, soy, almond, and cashew container.

        0
        May 2, 2022
    • David Drinkwater said:
      Well, Philip, you have successfully poked the bear. 🙂

      0
      May 2, 2022
  11. Vestager has been a career politician since age of 21 and behaves like one. Little substance and all attention grabbing nonsense. Surely Europe should be making friends with US instead of alienating them. Biden, please send a nice juicy bill for their support of Ukraine to the tune of 10 percent of EU GDP.

    1
    May 2, 2022
  12. Gary Morton said:
    Is this a bot writing a story? If not, the programmable algorithm would be quite simple: …Margrethe Vestager…some threatened regulatory overreach about Apple… Billions of dollars in fines…print and post. Vestager must have had some childhood trauma which her rather warped subconscious ascribes to Apple. There is something not right about her hatred of the company. Maybe she had stock back in the 1990s and sold when that entrepreneurial jerk who refused to bend the knee at the altar of the all powerful regulator’s came back to the company as CEO. A multimillion dollar lost investment opportunity may have pissed her off.

    0
    May 2, 2022
  13. David Drinkwater said:
    I think Cook and Vestager just need to get a room, but I doubt that that’s gonna work out.

    (If you can’t tell from my Avatar, I’m a gay rights activist. Sorry about all the politics lately.)

    0
    May 2, 2022

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