The European Union says it is accepting Apple’s pledge to open up its “tap-to-pay” iPhone payment system to rivals as a way to resolve an antitrust case and head off a hefty fine.
The European Commission, the EU’s executive arm and top antitrust enforcer, said on Thursday that it is accepting the commitments that Apple offered earlier this year and will make them legally binding.
The Commission had previously accused Apple of abusing its dominant position by limiting access to its mobile payment technology.
Apple responded by proposing in January to allow third-party mobile wallet and payment service providers access to the contactless payment function in its iOS operating system.
After Apple tweaked its proposals following testing and feedback, the Commission said it “concluded that Apple’s final commitments would address its competition concerns”.
“Today’s commitments end our Apple Pay investigation,” Margrethe Vestager, the commission’s executive vice president for competition policy, told a press briefing in Brussels. “The commitments bring important changes to how Apple operates in Europe to the benefit of competitors and customers.”
The deal promises more choice for Europeans as iPhone users will be able to set a default wallet of their choice while other mobile wallet developers will be able to use important iPhone verification functions like Face ID, Ms Vestager said.
Mobile wallets rely on near-field communication, or NFC, which uses a chip to wirelessly communicate with a merchant’s payment terminal.
The commission had charged the company with denying others access to Apple Pay, which it said is the biggest NFC-based mobile wallet on the market.
The changes that Apple is making are to remain in force for a decade and apply throughout the bloc’s 27 countries plus Iceland, Norway and Liechtenstein and will be monitored by a trustee.
Apple must make the changes in the EU by July 25.
“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,” Ms Vestager said.
Apple said in a statement that it is “providing developers in the European Economic Area with an option to enable NFC contactless payments and contactless transactions” for uses like car keys, corporate badges, hotel keys, and concert tickets.
Breaches of EU competition law can draw fines worth up to 10% of a company’s annual global revenue, which in Apple’s case, could have amounted to tens of billions of euros.