Apple faces antitrust investigation over Apple Pay

The European Commission has launched an antitrust investigation into Apple’s popular mobile wallet program Apple Pay. The Commission’s preliminary view states that Apple is in a dominant position in the market for mobile wallets on its operating system iOS and that it restricts competition by reserving access to Near-Field Communication (NFC) technology to Apple Pay.

NFC is technology that allows users to make secure transactions and exchange digital content by simply touching or coming within a 4 cm radius of the receiving device. A common example of NFC is the “tap” feature on debit and credit cards, allowing for a fast and efficient method of payment. Most modern smartphones have NFC capabilities and come equipped with payment service apps such as Google Pay, Apple Pay, and Samsung Pay. Using this technology, all the user has to do is add their debit or credit card number into the app and they will be able to simply tap their smartphone against a payment machine to wirelessly remit payment.

The European Commission has called Apple’s practices into question because of the high level of control Apple holds over a user operating on its iOS system. Apple’s software forms a “closed ecosystem” where Apple Pay is the only mobile wallet technology that is given access to the NFC output function on the iOS operating system. The Commission is of the view that by restricting access to other NFC platforms, Apple is restricting competition, pushing out other third-party developers and creating less choice for consumers who want to use NFC technology.

While the current investigation focuses on infringement of European laws and regulations, it could lead to additional scrutiny from Canadian policymakers and legal advocates who actively safeguard Canada’s consumer marketplace from practices that run the risk of creating a monopoly in any one industry.

Canadian legislation provides an avenue to compensation for consumers who suffer losses as a result of anti-competitive conduct and practices. This avenue can be taken individually or as a class action. The threshold for certifying Canadian class actions in the context of anti-competitive and restrictive marketplace behaviour is relatively low, compared to other areas of law, and provides an opportunity for claims to be determined together, maximizing opportunity, efficiency, and cost.

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