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EU Could Fine Apple $2.7B Over NFC Chip

As early as next year Apple could be hit with charges, as well as a steep antitrust fine from the European Union (EU) over its near-field communications (NFC) chip technology, according to a Wednesday (Oct. 6) report from Reuters citing sources. The European Commission can fine companies up to 10% of their global profits for skirting EU rules, according to the report. For Apple, that could mean a $2.7 billion fine based on its 2020 revenue of $27.4 billion, the news outlet noted.

At issue is the NFC chip, which is the technology that enables the wireless transfer of data that in turn lets users make contactless payments, among other tasks. The chip can only be accessed by Apple Pay, according to the report.

The European Commission is compiling a charge sheet outlining practices deemed to be anti-competition, according to Reuters.

Apple is facing similar scrutiny by Dutch antitrust regulators over Apple Pay, specifically its NFC operability, as reported previously in this space. The authority said Apple’s software only permits the software developer’s own payment app to connect to NFC technology, which, in turn prevents other enterprises whose apps are downloaded and used on the devices and who want NFC payment functionality embedded in those devices. Dutch regulators are investigating “whether limiting the payment apps’ access to NFC communication reduces the users’ freedom of choice,” according to PYMNTS. Depending on the outcome, Apple could face fines or other penalties.

Related: Apple’s NFC Practices Draw Scrutiny From Dutch Regulators

In summer 2020 the EU opened an antitrust investigation into Apple Pay. At issue is the tech giant’s proprietary in-app purchase (IAP) system, which limits the ability of developers to inform iPhone and iPad users of less expensive alternatives.

The Commission is also investigating IAP for the distribution of paid digital content, where Apple charges developers a 30 percent commission on all subscription fees.

Read also: EU Investigates Apple Pay, App Store

Apple has come under fire for its app store commissions. South Korea’s parliament in August authorized new mandates on Google and Apple that would effectively open up payments optionality for app developers, according to PYMNTS. The legislation would help developers avoid paying the commissions — which run as high as 15% to 30% per transaction — to Apple and Google.

See: South Korea Bill Signals Changes for App Store Payments Beyond Google, Apple

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