The EU has issued some very bad news to Apple

The EU has issued some very bad news to Apple ...

Apple (AAPL) has been charged by the European Union''s antitrust authorities. Apple has reported that its mobile phone chip technology had been restricted to consumers.

''''Apple Abused its Dominant Position''''

"We are concerned that Apple might have distorted competition on Apple devices," said EU antitrust chief Margrethe Vestager in her declaring of objections. "On a preliminary basis, we have found that Apple misled its dominant position."

According to Vinestager, "Apple has unjustly shielded its Apple Pay wallet from competition."

"Apple Pay is designed to provide a simple and secure way for users to digitally present their existing payment cards and for banks and other financial institutions to offer contactless payments for their customers," Apple said in a statement. "Apple Pay is only one of many options available to European consumers for making payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security."

The company said it "will continue to work with the Commission to ensure European consumers have access to the payment option they have chosen in a safe and secure environment.

Apple denied that it would have access to key components necessary to develop and execute mobile payment apps, or "mobile wallets," which allow for payment with a mobile device, in shops and online.

''''Tap and Go''''

Most brick-and-mortar purchases made with a mobile phone are made with a wireless connection called NFC or "Near Field Communication" which allows communication between a customer''s mobile phone and the payment terminal, thus permitting them to "tap and go."

NFC technology was developed by third parties, is standardized and available in almost all payment terminals in Europe.

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The EU said its concerns include Apple''s decision to exclude access to the NFC technology for payment purposes and to use it solely for Apple Pay.

Apple Pay requires users of Apple devices to pay only with the "tap and go" function, not with other wallets, according to the EU, because competing wallet developers need access to the NFC on Apple devices to reach Apple users.

Vestager said that developing a mobile payment application is costly and that investment may only be worthwhile if developers are capable of reaching both Apple and Android customers.

"Evidence on our file indicates that some developers did not go ahead with their intentions as they were not able to reach iPhone users," she said. "This behavior stifled innovation and impeded competition in the mobile wallet marketplace."

While there are other technologies, such as those based on QR code, that can be used for mobile payments,Vestager believes, the EU''s most widespread technology, and allows for a safe and seamless journey.

Access to the Ecosystem

"Apple has built a closed system around its devices and operating systems, iOS. And Apple has located the gateways to this ecosystem, posing the risk of reaching Apple users using Apple devices," said Viktor. "And other app developers depend on the accessibility to this ecosystem to develop innovative mobile wallets."

Apple''s security concerns are rejected, according to she, because evidence "indicates that Apple''s conduct cannot be justified by security concerns."

During an earnings'' announcement, CEO Tim Cook told analysts in January that "Appearance Pay''s growth has just been astounding."

"It''s been absolutely stunning," he said. "And there''s still a lot more going to go," he said. Because there''s still a lot of money in the environment. So I think that both of these and whatever else we might do have a great future ahead.

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