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The Dutch competition regulator has opened an investigation into contactless payments on smartphones, arguing that some systems could stifle innovation in the payments market. There is no named target for the probe, according to standard watchdog procedures, but the release suggests Apple and its iPhones are the focus.
Banks and fintech companies have long complained that only the Apple Pay digital wallet is allowed to access iPhones’ NFC chips for contactless payment purposes. “NFC” refers to near-field communication, the wireless technology that allows people to pay for things by pressing a card or phone on a reader.
This prevents competing payments companies from establishing their own lucrative digital wallets in Apple’s ecosystem. The Android ecosystem, on the other hand, allows NFC payments with wallets other than its own.
“This problem may stifle innovation in payment applications and reduce the freedom of choice for consumers and businesses,” the Dutch Consumer and Markets Authority (ACM) said in a statement. Friday statement.
The ACM noted that there are EU-wide financial regulations that say consumers should be able to choose their payment method in a physical store.
Then there is the question of whether Apple’s position violates EU competition law.. The European Commission opened in June a formal antitrust probe in this issue and others involving Apple Pay.
“ACM will examine whether limiting the access of payment applications to NFC communication reduces users’ freedom of choice,” the Dutch watchdog said on Friday. “ACM may also come to the conclusion that these rules were not broken. In this case, the investigation will be closed. If ACM establishes a violation, it may result in a penalty, such as a fine. “
However, the regulator said Fortune the main objective of the investigation was to ensure that “other payment applications will also be able to access NFC”.
In response to a request for comment, Apple did not refer directly to the Dutch investigation, but rather said that Apple competes “every day – working with banks, fintechs and merchants to be the best payment option for businesses and consumers across the Netherlands.
Apple has already argued that its NFC limitations are a necessary security measure; financial companies to disagree.
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