Good news for iPhone users: You will no longer have to use Apple Pay for tap-to-pay payments! Apple has decided to give a boost to third-party mobile wallet developers, by finally granting them free access to the handset’s near-field communication (NFC) contactless technology.
Now the bad news: The above does not apply to you if you live outside the European Economic Area, meaning the EU plus Norway, Iceland, and Liechtenstein.
Apple is only changing its ways to end a long-running antitrust case. The European Commission began investigating Apple’s restrictions on the iPhone’s NFC chip over four years ago and issued charges in 2022. Apple proposed changes earlier this year. The Commission asked app developers and various financial services companies for their opinions, then asked Apple to make some tweaks. Apple came back with a revised set of commitments, which the Commission announced today.
Under the commitments, Apple will have to give third-party mobile wallet developers NFC access for free, using a fair and objective process to decide their eligibility. These third-party wallets will run in host card emulation (HCE) mode to ensure secure storage of payment credentials, as already happens on Android. The Commission claims this is as secure as Apple Pay’s method of relying on a hardware “secure element” to protect details, and offers the same user experience.
Users will get to choose whichever wallet they like as the default, so it automatically pops up with a double-click on the side, or when the phone is placed next to a reader. People with Apple IDs registered in the EEA will also get to tap away with third-party wallets while traveling outside the region, but only if they’re on a temporary trip. Developers will also be able to combine their newfound payments functionality with other NFC-based features like using the phone as a concert ticket or car key.
The European Central Bank has given its stamp of approval to the changes, though it also suggested Apple might find itself saddled with further obligations when the digital euro becomes a reality (it’s currently in the preparation phase).
“From now on, Apple can no longer use its control over the iPhone ecosystem to keep other mobile wallets out of the market,” crowed the Commission’s antitrust chief, Margrethe Vestager, in a press conference today. “Competing wallet developers, as well as consumers, will benefit from these changes, opening up innovation and choice, while keeping payments secure.”
Taken alongside Apple’s grudging acceptance of third-party iOS app stores—one of its many obligations under the EU’s new Digital Markets Act—it’s clear that the company’s control is eroding fast.
This may only affect Europe for now, and there may yet be teething trouble in the implementation, but Apple’s big problem is that the rest of the world is watching. If third-party app stores and wallets can work in Europe without the sky caving in, then they can work elsewhere. And when the U.S. Federal Trade Commission or some other national regulator proposes a similar change, Apple won’t have much of a counterargument.
In other Apple news, Bloomberg reports that the company’s $3,499 Vision Pro virtual-reality headset still hasn’t broken the barrier of selling 100,000 units in a quarter, and U.S. sales in particular are likely to crater until a cheaper version comes along.
More news below.
David Meyer
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NEWSWORTHY
AMD AI M&A. AMD is buying a Finnish company called Silo AI for $665 million. It’s the biggest acquisition of a privately held European AI company yet. AMD SVP Vamsi Boppana told the Financial Times that the all-cash deal “helps us both accelerate our customer engagements and deployments while also helping us accelerate our own AI tech stack.” Silo’s 300-strong team will build custom large language models for AMD.
Intuit layoffs. The accounting software firm Intuit is laying off 1,800 workers, more than 1,000 of whom have not been meeting the company’s expectations, management said yesterday. However, as Fortune reports, Intuit also intends to hire at least 1,800 people next year as it pushes to incorporate AI into its services.
Germany bans Huawei. Germany has forbidden the use of Huawei and ZTE equipment in its 5G networks, in a somewhat belated concession to the U.S., which doesn’t want its allies using Chinese gear in such sensitive places. This is a very belated move. The U.S. hasn’t allowed its network operators to use such equipment for the last 12 years—and, as Politico reports, Germany will also take longer than expected to implement its ban. Operators will only have to get Huawei and ZTE out of their core network infrastructure by the end of 2026, and the companies’ equipment will be able to remain on antenna masts through the end of 2029.
SIGNIFICANT FIGURES
75.7%
—The proportion of online subscription services thatuse at least one “dark pattern” when marketing their subscriptions, according to a report from the Federal Trade Commission and its international counterparts. These tricksy user-interface practices include things like steering the consumer towards pricier subscriptions or forcing them to fill out payment information to access a “free trial” of the subscription.
IN CASE YOU MISSED IT
Exclusive: Armada lands $40 million in funding round led by Microsoft’s M12, by Allie Garfinkle
Samsung’s new phones, premium watch, and ring signal the company is going all-in on AI, giving Apple a run for its money, by the Associated Press
The walls are closing in on Tesla: EV makers just took a bite out of its market share, and investor Bill Gross says it’s a meme stock now, by Marco Quiroz-Gutierrez
AI has destroyed Google’s promise of carbon neutrality, with emissions rising 50% over the last five years, by Eva Roytburg
Microsoft shakes up its Game Pass service, hiking prices and dropping day-one games from the standard tier, by Chris Morris
Ask Andy: Can generative AI solve a startup’s problems?, by Andy Dunn
BEFORE YOU GO
Microsoft cloud settlement. One last piece of European Big Tech antitrust news: Microsoft is settling a complaint about its cloud licensing practices, to ward off an official investigation. In a deal with European cloud industry body CISPE, which lodged the complaint, Microsoft will let CISPE’s members more cheaply run its Azure cloud stack and services on their infrastructure. It will also pay them over $21 million to cover the excessive licensing costs they had to pay in the last couple years. However, Reuters reports that the settlement does not apply to Amazon Web Services, CISPE’s biggest member, so both AWS and Google Cloud are still loudly complaining about Microsoft’s licensing restrictions.
