Skip to main content

Market Overview

Apple Pay Draws Regulatory Attention Over Antitrust Concerns: FT

Apple Pay Draws Regulatory Attention Over Antitrust Concerns: FT

Apple Inc (NASDAQ: AAPL) is already deluged with probes for anti-competitive behavior related to the App Store. Now, the Financial Times reports, its digital wallet Apple Pay could be the next battleground for antitrust probes.

What Happened: Apple Pay’s growth has attracted little attention in the U.S. and only a passing mention by Congress’ antitrust subcommittee in October, as per FT. 

The antitrust issues in Apple Pay revolve around how it blocks its rivals from using the near-field communication technology (NFC) on its devices.

The European Commission opened a formal antitrust probe in Apple Pay in June and competition regulators in the Netherlands started their own investigation this month. FT reports that Apple’s approach to payments was raising competition issues in Australia.

Law firm Clifford Chance’s partner, Thomas Vinje, said that EU regulators have Apple Pay on their agenda. He added that there is political momentum behind pursuing antitrust cases against Apple.

“Apple only giving the consumer one option in how to use that technology to pay for services is what will get the attention of regulators,” said Jonathan Osborne, a former federal prosecutor in Florida.

FT reports that Apple spokeswoman Jennifer Bailey told the European Commission in December that the iPhone maker wants to keep the user data private and does not store the original bank card or credit card number. “When you buy something using Apple Pay, Apple doesn’t know what you bought, or where you bought it,” she said.

Another antitrust issue is that Apple asks app developers in an online guide to making Apple Pay the default option when possible.

Why It Matters: Apple controlling its full ecosystem has been a sticking point with third-party developers. This week, Facebook, Inc (NASDAQ: FB) took potshots at Apple in full-page ads. Apple, in response, said the new policies will only require the social media giant to give its users a choice.

Alibaba Group Holding Ltd (NYSE: BABA) Alipay and WeChat Pay have shown the capabilities of how contactless payments app can grow into microloans, wealth management, insurance, and paying bills.

FT reports that it is unclear that Apple has such ambitions. Still, Tim Cook recently told investors that Apple Pay is doing “exceptionally well” and the company is bullish about what it can do in the payments space. 

Price Action: AAPL shares closed 0.70% higher at $128.70 on Thursday.


Related Articles (AAPL)

View Comments and Join the Discussion!

Posted-In: Fintech Government News Regulations Legal Top Stories Tech Media Best of Benzinga