The UK's Competition and Markets Authority (CMA) has outlined proposals that would force Apple to open up the NFC tech 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 the different technical approaches across countries and platforms make it harder to scale and compete.
The regulator also points out 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, on the other hand, "not a single firm has launched a wallet-type product to compete with Apple's". That's in spite of contactless now making up 39% of all payments in the country, up from just 3% a decade ago, and over 60% of adults using a digital wallet, with Apple Wallet the most popular.
The CMA's proposals target two things. First, Apple would have to provide access through both of the main contactless standards used internationally: secure element (SE), which stores data on the device, and host-based card emulation (HCE), which stores it off the device. Apple currently only offers SE in the UK. The CMA says the evidence it has seen suggests neither standard raises inherent security concerns, and supporting both would let UK firms roll out payment services that are already available in the EU.
Second, access has to be commercially viable. The regulator won't set the prices itself, but it has proposed principles for how they should be determined, and it expects the resulting fees to be "substantially lower" than what Apple charges now, while still fairly rewarding the company. Beyond payment apps, the CMA envisions this opening the door to digital IDs and age verification tools, digital car, hotel, and workplace keys, tickets and travel passes, and loyalty programs.
Apple, for its part, isn't happy. "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 to reach an outcome that is in the best interest of our users."
The consultation closes on November 17, and the CMA will make a final decision after assessing the responses. The proposal is a conduct requirement under the UK's Digital Markets, Competition and Consumers Act of 2024, which applies to Apple because it was designated as having Strategic Market Status for its mobile platform.