The European Commission has announced that it is launching an investigation into Apple’s App Store and also their Apple Pay mobile payment system.
The investigation will apparently be looking into whether there is any anti-competitive behavior with Apple Pay.
Concerns Over Anti-Competitive Practices
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Mobile payment solutions are rapidly gaining acceptance among users of mobile devices, facilitating payments both online and in physical stores. This growth is accelerated by the coronavirus crisis, with increasing online payments and contactless payments in stores. It appears that Apple sets the conditions on how Apple Pay should be used in merchants’ apps and websites. It also reserves the “tap and go” functionality of iPhones to Apple Pay. It is important that Apple’s measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices. I have therefore decided to take a close look at Apple’s practices regarding Apple Pay and their impact on competition.”
The European Commission’s investigation will delve into several key areas. One of the primary concerns is whether Apple is unfairly limiting access to the NFC (Near Field Communication) chip in its devices, which is essential for contactless payments. By restricting this functionality to Apple Pay, Apple may be preventing other payment services from competing on a level playing field.
Impact on Consumers and Developers
Another aspect of the investigation will focus on the terms and conditions that Apple imposes on app developers. There have been numerous complaints from developers about the high commission fees Apple charges for transactions made through the App Store. These fees can be as high as 30%, which some argue stifles innovation and makes it difficult for smaller developers to compete.
Moreover, the investigation will examine whether Apple’s practices are leading to higher prices for consumers. If developers are forced to pay high fees, they may pass these costs onto consumers, resulting in more expensive apps and services. This could be particularly problematic in the current economic climate, where many people are already facing financial difficulties due to the pandemic.
The European Commission’s investigation is not the first time Apple has faced scrutiny over its business practices. In recent years, the company has been the subject of several high-profile legal battles and regulatory investigations around the world. For example, in 2019, the US Supreme Court allowed a lawsuit to proceed that accused Apple of monopolizing the app market and driving up prices.
It will be interesting to see what happens with this new investigation, specifically with Apple’s App Store and also with Apple Pay. The outcome could have significant implications for the tech giant and the broader mobile payments industry. If the European Commission finds that Apple has been engaging in anti-competitive behavior, it could result in substantial fines and force the company to change its business practices.
The European Commission’s investigation into Apple’s App Store and Apple Pay is a significant development in the ongoing debate over the company’s business practices. By examining whether Apple is engaging in anti-competitive behavior, the investigation could lead to important changes that benefit consumers and developers alike. As the investigation progresses, it will be crucial to monitor its findings and the potential impact on the mobile payments industry.
Source European Commission
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