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EU says Apple Pay restrictions could restrict competition

The European Commission said Monday it believes Apple (AAPL) has unfairly blocked competitors from using the wireless communication technology behind Apple Pay’s tap-to-pay features.
According to a statement of objections sent to the European Commission by Apple, the company has restricted competitors ‘access to its devices’ near-field communications (NFC) equipment, and only Apple Pay may use it.

This means that rivals who want to create apps or wallets using the tap-to-pay features on iPhones cannot do so, a rule from Apple that has hurt innovation, said Commission Executive Vice President Margrethe Vestager.

“It’s expensive to develop a mobile payment application,” Vestager said in a statement. “Investment can only be worth it if developers can reach both Apple and Android customers. Evidence on our file indicates that some developers did not go ahead with their plans as they were unable to reach iPhone users.”

Apple’s defense, Vestager continued, was that its restrictions are intended to protect users from security risks and that consumers could be harmed by easing the restrictions. Apple did not immediately respond to a request from CNN for comment.

“Our investigation to date revealed no evidence that could point to such a higher security risk,” Vestager said. “On the contrary, evidence in our case file suggests that Apple’s conduct cannot be justified for security reasons.”

The warning does not represent a final decision on liability. Apple now has the opportunity to submit a formal response.

Apple has been subject to increasing regulatory scrutiny in Europe as officials have targeted a number of its business practices as potentially anti-competitive, such as its practice of blocking the installation of apps outside its own App Store.

The EU’s forthcoming digital market law could force Apple to allow such installations, force it to open up access to its NFC chips and bring other radical changes to the technology industry that is comprehensive.

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