The European Commission (EC) has opened an antitrust investigation to assess whether Apple's conduct in connection with Apple Pay violates EU competition rules.

The investigation concerns Apple's terms, conditions and other measures for integrating Apple Pay in merchant apps and websites on iPhones and iPads, Apple's limitation of access to the Near Field Communication (NFC) functionality for ‘tap and go’ on iPhones for payments in stores, and alleged refusals of access to Apple Pay.

EC executive vice president Margrethe Vestager, in charge of competition policy, said: "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."

Following a preliminary investigation, the EC raised concerns that Apple's terms, conditions and other measures related to the integration of Apple Pay for the purchase of goods and services on merchant apps and websites may distort competition and reduce choice and innovation.

In addition, Apple Pay is the only mobile payment solution that may access the NFC tap and go technology embedded on iOS mobile devices for payments in stores. The investigation will also focus on alleged restrictions of access to Apple Pay for specific products of rivals on iOS and iPadOS smart mobile devices.

If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies and/or on the abuse of a dominant position.

In parallel, the EC has also opened antitrust investigations to assess whether Apple's rules for app developers on the distribution of apps via the App Store violate EU competition rules.

The investigations concern in particular the mandatory use of Apple's own proprietary in-app purchase system and restrictions on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.

The investigations concern the application of these rules to all apps, which compete with Apple's own apps and services in the European Economic Area (EEA). The investigations follow-up on separate complaints by Spotify and by an e-book/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-books/audiobooks.

Vestager commented: "It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple's popular devices – we need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books.”

A statement explained that iPhone and iPad users can only download native apps via the App Store.

The EC will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices: the mandatory use of Apple's own proprietary in-app purchase system for the distribution of paid digital content - via which Apple charges app developers a 30 per cent commission on all subscription fees - and restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps, which is usually cheaper.

On 11 March 2019, music streaming provider and competitor of Apple Music, Spotify, filed a complaint about the two rules in Apple's license agreements with developers and the associated App Store Review Guidelines, and their impact on competition for music streaming services.

Following a preliminary investigation, the EC raised concerns that Apple's restrictions may distort competition for music streaming services on Apple's devices. Its competitors have either decided to disable the in-app subscription possibility altogether or have raised their subscription prices in the app and passed on Apple's fee to consumers. In both cases, they were not allowed to inform users about alternative subscription possibilities outside of the app.

On 5 March 2020, an unnamed e-book and audiobook distributor, also filed a complaint against Apple, which competes with the complainant through its Apple Books app. This complaint raises similar concerns to those under investigation in the Spotify case, but with regard to the distribution of e-books and audiobooks.

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