EU to Accuse Apple of Unfairly Blocking Third-Party Access to NFC Payment Technology on iPhone

[duffman9000]

If you’re leveraging your large user base and market share in smartphones (or their OS) to muscle your way in to consumer payments (the ones that take place millions of times every day in economies such as the EU), competition, competition authorities and ultimately regulators will take notice.

Consumer and card payments are heavily (and quite successfully) regulated in the EU. Card payments are already in the process of being replaced by their virtual counterparts on consumer’s smartphones. Physical cards are probably going to merely act fallback payment devices in the foreseeable future.

What Apple is doing with Apple Pay, is muscling their way in between card issuers, schemes, consumers and merchants, to charge (albeit a very small) share of every card payment transaction that iPhone-owning consumers are going to make at merchants, physical retail stores and service establishments.

I see. VISA, MasterCard, and American Express are already taking a cut from every credit card transaction. Those gangsters don’t want anyone taking a piece of their pie.

 

[vipergts2207]

Yes the OS’s I mentioned don’t exist because developers chose no to support them and they died off. Now you have only 2 options to choose from.

This problem with lack of choice and monopoly between Android and iOS is a problem developers created by not supporting other operating system they killed them off.

I'm sure many developers don't have the resources to support 4, 5, or 6 different platforms. This means regardless of how many platforms are on the market initially, over time developers with limited resources will focus on the most popular ones to get the most bang for their buck. Consumers then factor the wide variety of apps available on a platform into their buying decisions. This creates a steady feedback loop where limited developer resources are directed at the most popular platforms and consumers buy the devices with the most apps they want and need. Eventually the loser platforms die off. This is exactly what happened a decade ago.

 

[I7guy]

If you’re leveraging your large user base and market share in smartphones (or their OS) to muscle your way in to consumer payments (the ones that take place millions of times every day in economies such as the EU), competition, competition authorities and ultimately regulators will take notice.

Consumer and card payments are heavily (and quite successfully) regulated in the EU. Card payments are already in the process of being replaced by their virtual counterparts on consumer’s smartphones. Physical cards are probably going to merely act fallback payment devices in the foreseeable future.

What Apple is doing with Apple Pay, is muscling their way in between card issuers, schemes, consumers and merchants, to charge (albeit a very small) share of every card payment transaction that iPhone-owning consumers are going to make at merchants, physical retail stores and service establishments.

Really? Apple put a gun to everyone's head, like the 1930's gangsters in Chicago? Nobody has to play ball with Apple, but they know that with the iphone there is money to be made for all and therefore they WILLINGLY sign on the dotted line.

 

[I7guy]

iOS vs. Android: Which OS Is More Secure in 2022?

iOS vs. Android: Which OS is more secure? To find out, we have to consider vulnerabilities found in each operating system’s updates over the years.

clario.co

No, Your iPhone Is Not More Secure Than Android, Warns Cyber Billionaire

An alarming new surge in malicious apps is a much more serious threat to iPhone users than you might think...

www.forbes.com

That ios 5 is even on the list is a testament to how bogus the above is.

 

[BaldiMac]

What if a bank wants to implement a useful NFC feature in their banking app that Apple's Wallet app doesn't allow for? Instead of being able to create a unique and useful experience for those using their card in their own app, Apple won't allow it. This keeps the bank from creating unique, beneficial features for their own card that competes against the Apple Card. Apparently you don't see these things as anti-competitive and you're free to that belief. Like I said before, governments can see that stuff for exactly what it is. Good on them for taking action.

That's just a loaded question. Why should Apple be forced to provide features to that bank that it doesn't provide to anyone else including itself?

It's card has access to the NFC chip just like Apple Card.

As an aside, what on Earth could Apple do with access to an NFC chip in a credit card?? A credit card isn't an interactive device. It has a single purpose, to make purchases. It's a completely passive item.

Who knows? Shouldn't we force Bank of America or VISA to build a way for Apple to use it? It's certainly unfair that Bank of America VISA cards don't allow their competitors to use the chip! They're preventing competition!

/s

 

[vipergts2207]

That's just a loaded question. Why should Apple be forced to provide features to that bank that it doesn't provide to anyone else including itself?

Wait what? In my scenario what features would Apple be providing the bank that Apple doesn't provide for itself? The only thing required of Apple in my scenario is access to the NFC chip for the bank, which is something Apple does in fact provide for itself and their own card.

 

[BaldiMac]

Wait what? In my scenario what features would Apple be providing the bank that Apple doesn't provide for itself? The only thing required of Apple in my scenario is access to the NFC chip for the bank, which is something Apple does in fact provide for itself and their own card.

It already provides competing cards with access to the NFC chip. That's why I said that it's a loaded question. What features is the Apple Card currently taking advantage of that aren't accessible to competitors?

 

[danakin]

Apple should leave the EU. Im joking.

Well played

 

[vipergts2207]

It already provides competing cards with access to the NFC chip. That's why I said that it's a loaded question. What features is the Apple Card currently taking advantage of that aren't accessible to competitors?

No, Apple allows for credit card companies to put their card into Apple's app. Apple gives their own card app full access to the NFC chip to be used in whatever way Apple desires. Apple does not give this same access to the credit card company and their app. If a credit card company has a creative idea for their card and app that requires NFC access, they're effectively unable to compete by offering a superior product to Apple's card and app. Apple is placing artificial limitations on how good a competitor's offering may be.

 

[I7guy]

No, Apple allows for credit card companies to put their card into Apple's app. Apple gives their own card app full access to the NFC chip to be used in whatever way Apple desires. Apple does not give this same access to the credit card company and their app. If a credit card company has a creative idea for their card and app that requires NFC access, they're effectively unable to compete by offering a superior product to Apple's card and app. Apple is placing artificial limitations on how good a competitor's offering may be.

Right, and it's still Apple's platform. It's apples secure platform and they have opened up the NFC already, not just for those who want to steal Apples' dollars using Apples' hardware for free. Competition by regulation, it's the only way to go. Build it, deploy it and let the government regulate it such that the freeloaders have access to it.

 

[Macative]

I don't know, I think it's a useful and easy way to tell those who are able to think critically apart from those who aren't.

Far from it. You people that don't realize there are consequences to government overreach are the last people who should be criticizing anyone else's ability to think critically.

 

[BaldiMac]

No, Apple allows for credit card companies to put their card into Apple's app. Apple gives their own card app full access to the NFC chip to be used in whatever way Apple desires. Apple does not give this same access to the credit card company and their app. If a credit card company has a creative idea for their card and app that requires NFC access, they're effectively unable to compete by offering a superior product to Apple's card and app. Apple is placing artificial limitations on how good a competitor's offering may be.

You’ve made the same claim again, but you didn’t answer the question. What features is the Apple Card currently taking advantage of that aren't accessible to competitors?

 

[vipergts2207]

Right, and it's still Apple's platform. It's apples secure platform and they have opened up the NFC already, not just for those who want to steal Apples' dollars using Apples' hardware for free. Competition by regulation, it's the only way to go. Build it, deploy it and let the government regulate it such that the freeloaders have access to it.

You say that negatively, failing to acknowledge that this is how general computing existed for decades.

Far from it. You people that don't realize there are consequences to government overreach are the last people who should be criticizing anyone else's ability to think critically.

You might have a point if this were government overreach. And while we can disagree on whether or not this government overreach, I would think we can agree that Apple giving up a quarter of their global revenue would indeed be untenable and very stupid.

You’ve made the same claim again, but you didn’t answer the question. What features is the Apple Card currently taking advantage of that aren't accessible to competitors?

The Apple Card's app has NFC chip access. Neither my Amex nor Chase card's apps have NFC chip access.

 

[dk001]

I'm not sure what you mean by interoperability in this context. NFC chips are already interoperable. You use the same reader for Apple Pay, Google Pay, Tap to Pay cards, etc.

I was looking at all the "requests", not just NFC.

 

[BaldiMac]

The Apple Card's app has NFC chip access. Neither my Amex nor Chase card's apps have NFC chip access.

You didn’t answer the question. Probably because there’s no evidence that the Apple Card uses any NFC features that aren’t available to other cards.

AmEx and chase both have api access to the wallet app.

 

[vipergts2207]

You didn’t answer the question. Probably because there’s no evidence that the Apple Card uses any NFC features that aren’t available to other cards.

AmEx and chase both have api access to the wallet app.

I did answer the question. The Amex card's app doesn't have access to the NFC chip. Apple's card's app does. That is the answer and I'm not sure what you don't understand here. Without access to the NFC chip those card issuers are not able to implement useful ideas for their card and their own app they may have that require direct NFC access. This means Apple can artificially limit the abilities of a competing card issuer's app, and by extension the potential of a more competitive feature set for the bank's associated card offering. A card issuer is unable to implement competitive NFC-based features in their offering that Apple has not thought of. If Amex thinks of a great idea for the NFC chip in their app, if they're unable to implement that idea, they are effectively being limited in ways they can compete that could draw customers to their card over Apple's card. If this sounds repetitive, that's because it is. I really don't know how many different ways I can explain it to get you to comprehend the issue.

 

[Abazigal]

Wait what? In my scenario what features would Apple be providing the bank that Apple doesn't provide for itself? The only thing required of Apple in my scenario is access to the NFC chip for the bank, which is something Apple does in fact provide for itself and their own card.

The question isn’t so much that Apple can’t do this, and more that they don’t have to.

I don’t agree that Apple is somehow obligated to make every feature and API accessible to all developers and competitors.

They cry “unfair” when they really mean “not to my benefit” and act like it’s somehow their god-given right that they be allowed to access features like NFC on the iPhone.

And at the end of the day, it seems like everyone crying foul is after the same thing - they want to be able to piggyback on the Apple ecosystem and access its billion-strong user base without giving anything back to the platform.

 

[Boris Bronson]

Far from it. You people that don't realize there are consequences to government overreach are the last people who should be criticizing anyone else's ability to think critically.

lol - I mean megalolz. You really think EU consumers will be marching on Brussels over an iPhone? You’re funny.

 

[vipergts2207]

The question isn’t so much that Apple can’t do this, and more that they don’t have to.

I don’t agree that Apple is somehow obligated to make every feature and API accessible to all developers and competitors.

They cry “unfair” when they really mean “not to my benefit” and act like it’s somehow their god-given right that they be allowed to access features like NFC on the iPhone.

That's exactly why so many countries are looking to make sure that is no longer the case.

And at the end of the day, it seems like everyone crying foul is after the same thing - they want to be able to piggyback on the Apple ecosystem and access its billion-strong user base without giving anything back to the platform.

I don't really care if folks want to use Apple's platform "without giving anything back." I buy Apple's platform because it's useful to me, not because it makes AAPL shareholders money. Definitely won't be losing any sleep over it considering Apple just reported the highest Q2 revenue ever.

 

[AppliedMicro]

The countries that are mostly cashless, they developed a specific regulation to achieve this. In the rest of the world including the EU, where you can still pay with cash and credit card, its a convenience.

You’re right. “Essential” Apple’s service is not (with respect to NFC payments), it’s a convenience.
There is and will be strong demand for this convenience though, to replace physical cards and cash within a few years though. Mobile payments with your smartphone will be the de facto standard and most popular payment soon (if and where it isn’t already) and Apple intends to leverage that anticompetitively.

Regulation have to be done when needed, not when you want to cripple companies, and they have to be fair for all the players.

The EU doesn’t want to cripple Apple.
They want to level the playing field or limit gatekeepers’ power for competitors in services that use the gatekeeper’s platform to provide services.

For a lot of these items coming from the RU, Japan, and others (?), most are not Apple specific.
NFC? yeah, that is Apple specific.

Then again, Apple’s lockdown on NFC (at least for payment applications) is Apple-specific - since on Android other payment apps are able to use the interface.

I see. VISA, MasterCard, and American Express are already taking a cut from every credit card transaction. Those gangsters don’t want anyone taking a piece of their pie.

No, it’s not them. They’re getting their share anyway.
Apple Pay signs up card issuers - they are the ones getting charged the Apple tax primarily (and they have much less bargaining power than VISA and Mastercard).

Really? Apple put a gun to everyone's head, like the 1930's gangsters in Chicago? Nobody has to play ball with Apple, but they know that with the iphone there is money to be made for all and therefore they WILLINGLY sign on the dotted line.

Companies can “leverage” or abuse (the difference between the two being a blurry one) their market power even without guns to people’s heads.

 

[gnipgnop]

Consumers have little to no bargaining power in a monopoly, so "the invisible hand of the market" effectively ceases to exist. The choice then becomes whether to leave the market as it is and let those major players dictate the terms of participating in those markets (in this case, owning a smartphone), or imposing some other level of control (usually through government regulation) to either curb specific abuses of that monopoly power, or give consumers more competitive leverage against the monopolist. In most cases, regulatory controls like this only get introduced when it has become quite clear that a major player is abusing their monopolistic power.

Like I've already pointed out, nobody can claim that the iOS/App Store and Android/Play Store market for smartphones made things worse for consumers OR developers than the Nokia/Blackberry/Palm market for smartphones. So there's nothing in the past for smartphones that the EU can point to that was better. That by itself calls into question the idea of "abuse". The vast majority of consumers would not want to go back to the Nokia E62 versus current iOS or Android smartphones.

And if you compare the mobile market to desktop/laptop, can you realistically make an argument that bargaining power for consumers has "ceased to exist"? For both hardware and software, the mobile market has experienced a significant level of improvement from 2007-2022. Nobody can deny that. It's improved in leaps and bounds. The relative computing power and app sophistication of a 2007-2009 circa iOS/Android phone seems quite primitive now. That's supposed to be representative of dysfunctional market that lacks competition?

A non-competitive market should show clear signs of stagnation where companies can force consumers to continue to pay without offering much of anything that is improved or is even worse than before.

 

[AppliedMicro]

A non-competitive market should show clear signs of stagnation where companies can force consumers to continue to pay without offering much of anything that is improved or is even worse than before.

…like the recent trend and push towards in-app subscription pricing, you mean?

Quite a fitting description that you provided there.

 

[vipergts2207]

Like I've already pointed out, nobody can claim that the iOS/App Store and Android/Play Store market for smartphones made things worse for consumers OR developers than the Nokia/Blackberry/Palm market for smartphones. So there's nothing in the past for smartphones that the EU can point to that was better. That by itself calls into question the idea of "abuse". The vast majority of consumers would not want to go back to the Nokia E62 versus current iOS or Android smartphones.

And if you compare the mobile market to desktop/laptop, can you realistically make an argument that bargaining power for consumers has "ceased to exist"? For both hardware and software, the mobile market has experienced a significant level of improvement from 2007-2022. Nobody can deny that. It's improved in leaps and bounds. The relative computing power and app sophistication of a 2007-2009 circa iOS/Android phone seems quite primitive now. That's supposed to be representative of dysfunctional market that lacks competition?

A non-competitive market should show clear signs of stagnation where companies can force consumers to continue to pay without offering much of anything that is improved or is even worse than before.

Nobody is saying there isn’t sufficient competition in smartphone hardware. The lack of competition is in the software and app distribution areas.

 

[gnipgnop]

That’s a very good description of in-app subscription pricing.

And how would in-app subscription pricing on mobile compare to subscription pricing on desktop/laptop? Do developers on desktop/laptop try to avoid making people pay for software through subscriptions?

 

[gnipgnop]

Nobody is saying there isn’t sufficient competition in smartphone hardware. The lack of competition is in the software and app distribution areas.

That's a nonsensical statement. Everyone knows that the software on mobile has increased in sophistication in parallel to all of the hardware improvements. That's the way it works. Microsoft didn't launch the Xbox Series X so that developers could continue to make Xbox 360 games.