EU escalates Apple Pay probe into contactless payments

Apple may unfairly favor its Apple Pay service by limiting rivals' access to a technology used to make contactless payments, the European Commission said as it escalated its investigation by sending a statement of objections

The Commission said Monday that Apple may have abused its dominant position in the market for mobile wallets on iOS-based devices and restricted access to the so-called Near Field Communication technology, which allows the iPhone to make payments in stores. Apple's conduct may shut out rival payment providers and reduce consumers' options for mobile wallets on iPhones, the authority said.

"We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices," EU competition chief Margrethe Vestager said. "In our statement of objections, we preliminarily found that Apple may have restricted competition, to the benefit of its own solution, Apple Pay."

Apple said that security is a key element of its approach to payment services. Its contactless payment technology is designed to prevent fraud through a security chip in the iPhone’s antenna. Opening that up would make the system vulnerable to abuse, the company said.

"Apple Pay is only one of many options available to European consumers for making payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security," a company spokesperson said.

A statement of objections lays out the results of an initial antitrust investigation. Apple can respond to the charges in writing and can choose an oral hearing to defend itself before the Commission makes any final decision on whether the company may have breached antitrust rules.