Third-Party Mobile Wallets Gain Access to iPhone’s NFC Technology in EuropeThird-Party Mobile Wallets Gain Access to iPhone’s NFC Technology in Europe Following an antitrust investigation, Apple is opening up its iPhone’s near-field communication (NFC) technology to third-party mobile wallet developers in the European Economic Area (EEA). Restrictions Removed in EEA Countries Previously, Apple limited payment transactions to its own Apple Pay service, but the company faced legal scrutiny from the European Commission. Under the revised commitments, Apple will grant free access to third-party wallets, allowing them to access the iPhone’s NFC chip for tap-to-pay transactions. Host Card Emulation Mode Third-party wallets will operate in host card emulation (HCE) mode, a secure method of storing payment data on Android devices. The European Commission considers HCE as secure as Apple Pay’s hardware “secure element” method. User Choice and Convenience Users will have the choice to select a default wallet that automatically appears for tap-to-pay payments. They can also temporarily use third-party wallets when traveling outside the EEA. Potential Implications This move suggests that Apple’s control over its ecosystem is eroding, particularly in Europe. If third-party app stores and wallets succeed in the EEA, other regulators worldwide may seek similar changes. Other Apple News * Apple’s Vision Pro virtual reality headset has failed to meet sales expectations. * AMD has acquired Silo AI to accelerate its AI capabilities. * Intuit is laying off 1,800 employees, while preparing to hire 1,800 next year to integrate AI. * Germany has banned Huawei and ZTE equipment from its 5G networks. Significant Figures * 75.7% of online subscription services use “dark patterns” in their marketing practices. Before You Go Microsoft has settled a complaint over its cloud licensing practices with the European cloud industry body CISPE. AWS, however, remains critical of Microsoft’s restrictions.
Good news iPhone users: you no longer have to use Apple Pay for tap-to-pay payments! Apple has decided to give third-party mobile wallet developers a boost by finally giving 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, which means the EU plus Norway, Iceland and Liechtenstein.
Apple is changing its approach only to end a long-running antitrust case. The European Commission began investigating Apple’s restrictions on the iPhone’s NFC chip four years ago, filing charges in 2022. Apple proposed changes earlier this year. The commission asked app developers and several financial services companies for their input, then asked Apple to make some adjustments. Apple came back with a revised set of commitments, which the commission announced today.
Under the commitments, Apple will have to provide NFC access to third-party mobile wallet developers for free, using a fair and objective process to determine eligibility. These third-party wallets will run in host card emulation (HCE) mode to ensure secure storage of payment data, as is already the case on Android. The Commission claims this is as secure as Apple Pay’s method of relying on a hardware “secure element” to protect data, and provides the same user experience.
Users can choose which wallet they want as their default, so that it automatically appears with a double-tap on the side or when the phone is placed next to a reader. People with Apple IDs registered in the EEA can also tap third-party wallets when traveling outside the region, but only if they are temporarily away. Developers can also combine their new payment functionality with other NFC-based features, such as using the phone as a concert ticket or car key.
The European Central Bank has approved the changes, but also indicated that Apple may face further obligations once the digital euro becomes a reality (the company is currently still in the preparation phase).
“As of now, Apple can no longer use its control over the iPhone ecosystem to keep other mobile wallets off the market,” the Commission’s antitrust chief, Margrethe Vestager, crowed at a press conference today. “Riding wallet developers, but also consumers, will benefit from these changes, which will enable innovation and choice, while keeping payments secure.”
When we compare that to Apple’s reluctant acceptance of third-party iOS app stores (one of many obligations Apple has under the EU’s new Digital Markets Act), it’s clear that the company’s control is rapidly eroding.
This may only affect Europe, and there may be teething problems with 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 falling down, they can work anywhere else. And if the US Federal Trade Commission or another national regulator proposes a similar change, Apple won’t have much of an argument to make.
In other Apple news, Bloomberg reports that the company’s $3,499 Vision Pro virtual reality headset has yet to break the 100,000-unit mark in sales in a single quarter. Sales are likely to decline, particularly in the U.S., until a cheaper version comes to market.
More news below.
David Meyer
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NEWSWORTHY
AMD AI Mergers and Acquisitions. AMD is buying a Finnish company called Silo AI for $665 million. It is the largest acquisition of a private European AI company to date, AMD SVP Vamsi Boppana told the Financial Times that the all-cash deal “will help us accelerate our customer engagements and deployments while also accelerating our own AI tech stack.” Silo’s 300-person team will build custom large language models for AMD.
Laid off at Intuit. Accounting software company Intuit is laying off 1,800 workers, more than 1,000 of whom are not meeting the company’s expectations, management said yesterday. However, as Fortune According to reports, Intuit plans to hire at least 1,800 people next year as it integrates AI into its services.
Germany bans Huawei. Germany has banned Huawei and ZTE equipment from its 5G networks, in a somewhat belated concession to the US, which doesn’t want its allies using Chinese gear in such sensitive areas. This is a very late move. The US hasn’t allowed its network operators to use such equipment for the past 12 years, and as Politico reports, Germany will also take longer than expected to enforce the ban. Operators don’t have to remove Huawei and ZTE from their core network infrastructure until the end of 2026, and the companies’ equipment can remain on antenna masts until the end of 2029.
SIGNIFICANT FIGURES
75.7%
-The share of online subscription services that Use at least one “dark pattern” in marketing their subscriptions, according to a report by the Federal Trade Commission and its international counterparts. These troublesome user interface practices include things like steering consumers toward more expensive subscriptions or forcing them to enter payment information to access a “free trial” of the subscription.
IN CASE YOU MISSED IT
Exclusive: Armada Raises $40M in Funding Round Led by Microsoft’s M12, by Allie Garfinkle
Samsung’s new phones, premium watch and ringer: the company is going all-in on AI, giving Apple a competitive edge, by Associated Press
The Walls Are Closing in on Tesla: EV Makers Just Took a Bite Out of Market Share and Investor Bill Gross Says It’s Now a Meme Stock, by Marco Quiroz-Gutierrez
AI has destroyed Google’s pledge of carbon neutrality, with emissions rising 50% in the last five years, by Eva Roytburg
Microsoft is shaking up its Game Pass service, raising prices and removing 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 final piece of European Big Tech antitrust news: Microsoft is settling a complaint over its cloud licensing practices, averting a formal investigation. In a deal with European cloud industry body CISPE, which filed the complaint, Microsoft will let CISPE members run its Azure cloud stack and services on its infrastructure at a lower price. It will also pay them more than $21 million to cover the excessive licensing fees they’ve been forced to pay in recent years. However, Reuters reports that the settlement does not apply to Amazon Web Services, CISPE’s largest member, so both AWS and Google Cloud are still vocal about Microsoft’s licensing restrictions.
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