Germany passes law that could force Apple to open up the iPhone’s NFC chip to rival mobile payment platforms


The big picture: In a move that sets a new precedent, a German parliamentary committee rushed to vote a new law during a late-night session that would force tech giants like Apple to open up NFC functionality to its competitors in the mobile payments space.

By now it’s no secret that Apple has restricted the use of NFC functionality on the iPhone and Apple Watch to its Apple Pay mobile payments service and a small number of third parties. During this year’s WWDC keynote, Apple revealed it would open the NFC chip in its devices for third-party developers, possibly enabling huge cost savings for services that require the use of cards and tap-to-pay systems.

According to a report from Reuters, Germany recently passed a law that would force Apple to expose its NFC tech to rival payment services so that they could compete on a level playing field with the company’s offering. The regulators didn’t specifically target the Cupertino giant with the law, which is actually an amendment to an anti-money laundering bill that is set to come into effect as early as next year.

The new legislation is supposed to open the infrastructure of “operators of electronic money to offer access to rivals for a reasonable fee.” To put things in perspective, that’s also how Google’s model works: different mobile payment services like Samsung Pay can compete with Google Pay on phones that have NFC chips.

Naturally, Apple responded negatively to the news. A spokesperson said in a statement that the company is “surprised at how suddenly this legislation was introduced. We fear that the draft of the law could be harmful to user friendliness, data protection and the security of financial information.”

According to Zeit Online, the publication that first spotted the draft, US embassy officials have tried to intervene in the decision along with Chancellor Angela Merkel, who asked for the amendment to be withdrawn.

Apple might be worried about the fact that once a EU country passes such legislation, other countries from the bloc could quickly follow suit. However, the more pressing problem is that Margrethe Vestager, who is now in charge of digital policy in the region, is interested in taking a closer look at Apple Pay from an antitrust perspective.

Vestager told Bloomberg last month that “convenience can come with a very big price if it shuts down competition, because then eventually you may have to pay a higher price either in terms of money or fees or in terms of data.” She’s convinced that “payment systems is an obvious place where it is beneficial for consumers that different payment systems can work together.”

In the meantime, the Cupertino giant has to fight a similar stance in Australia, where big banks have recently complained that they are locked out of Apple’s NFC tech and as a result can’t compete using their own mobile wallet apps.


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