The UK's Competition and Markets Authority (CMA) has outlined proposals that would force Apple to open up the NFC technology in the iPhone to more third parties, on more favorable terms. According to the regulator, "Apple's fees and rules are blocking UK fintechs and other businesses from innovating and growing."
The CMA says it has heard from UK businesses that Apple's current NFC access arrangements may not be commercially viable, that its fees and other terms may be onerous, and that differing technical approaches across countries and platforms make it harder to scale and compete. The regulator also points to a stark contrast with the EU. Just six months after Apple agreed to provide NFC access for payments there, Vipps launched the first alternative payment app, followed by PayPal, Klarna, Curve, and BBVA. In the UK, "not a single firm has launched a wallet-type product to compete with Apple's," even though contactless now makes up 39% of all payments in the country, up from just 3% a decade ago.
The CMA's proposals target two things. First, Apple would have to support both main contactless standards: secure element (SE), which stores data on the device, and host-based card emulation (HCE), which stores it off the device. Apple currently offers only SE in the UK. The CMA says neither standard raises inherent security concerns. Second, access must be commercially viable. The regulator won't set prices itself, but it expects fees to be "substantially lower" than Apple's current charges while still fairly rewarding the company. The CMA also envisions the opening extending to digital IDs, age verification, digital keys, tickets, travel passes and loyalty programs.
Apple disagrees. "We do not believe the CMA should require Apple to adopt an approach with lower privacy and security protections," a company spokesperson told Reuters, adding that it "will continue to engage constructively." The consultation closes on November 17, after which the CMA will make a final decision. The proposal is a conduct requirement under the UK's Digital Markets, Competition and Consumers Act of 2024, which applies to Apple because it has Strategic Market Status for its mobile platform.
Source: GSMArena · Summarized by HeadlinesBriefing