What you need to know
- Apple is the subject of a European Commission Statement of Objections surrounding its locking down of NFC technology on iPhones.
- A new report claims that PayPal was behind the initial decision to look into Apple's payments system.
- The European Commission believes Apple Pay has benefitted from being the only NFC-enabled payment wallet available to iPhone users.
PayPal wants to be able to use the NFC tech inside iPhones but Apple won't let it.
Online payments company PayPal was reportedly behind the European Commission's (EC) decision to take a closer look at how Apple locks down NFC payments on its iPhone hardware. Apple Pay is the only payment system granted access to NFC tech on iPhones and an EC Statement of Objections has been passed to Apple.
That Statement of Objection was detailed earlier this week but a new Bloomberg report claims that it was PayPal that got things moving. Currently, PayPal isn't allowed to compete with Apple Pay due to Apple's locking down of NFC capabilities in the iPhone. The same goes for Apple Watch hardware, too.
PayPal Holdings Inc. helped spur a formal antitrust complaint against Apple Inc. and its iPhone payments system by raising concerns with the European Commission, according to people with knowledge of the matter.
In its earlier statement, the EC had claimed that Apple restricts competition for mobile wallets on iOS, allowing Apple Pay an unfair advantage.
The European Commission has informed Apple of its preliminary view that it abused its dominant position in markets for mobile wallets on iOS devices. 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.
The fact that PayPal was one of the players involved in the EC's decision to get involved shouldn't be all that surprising, but it's notable. Apple continues to come under pressure from various antitrust cases around the world and companies like PayPal will be waiting in the wings to take advantage of any changes Apple makes — whether by choice or after having been forced to by international governments.
Apple Pay is undoubtedly one of the best iPhone features around, especially when coupled with Express Transit. Whether alternatives from the likes of PayPal will be offered in the future is unclear, but it doesn't seem likely to be something Apple will offer without a fight.