An iPhone using Apple Pay
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Apple’s new antitrust fight

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Good morning! Apple is once again facing an antitrust battle, this time over Apple Pay. I’m Ben Brody, and getting a slight head injury has made me cringe every time someone gets bashed on the noggin on TV.

The battle over Apple Pay

Apple just can’t catch a break. But in Europe, no American tech company can. The European Commission is on a tear this year, introducing new rules that would force big tech companies to open up their platforms and police them aggressively for allowing illegal content. But this week, it’s Apple specifically that’s under the microscope.

Apple’s latest antitrust fight is over Apple Pay. The European Commission announced yesterday that it believes Apple is violating antitrust rules by refusing to allow rival mobile wallets to offer tap-to-pay functionality on the iPhone. Apple allows developers to access the iPhone’s NFC chip, but not to connect to payment systems in physical stores. That means Apple Pay is the only option on iPhones — and the EU is not happy about it.

  • The commission sent its "preliminary view" to Apple, saying that the company "abused its dominant position" in giving a boost to its own contactless payments system. Now Apple has the chance to address the EU’s concerns. The company can also request an oral hearing.
  • “Apple has built a closed ecosystem around its devices and its operating system,” said EU antitrust chief Margrethe Vestager, who is also the bloc’s commissioner overseeing competition. “Apple controls the gates to this ecosystem, setting the rules of the game for anyone who wants to reach consumers using Apple devices.”
  • If the EU finds Apple guilty of anticompetitive behavior, it could be forced to pay up to 30% of its revenue from Apple Pay. That’s not a huge amount of money for Apple, at least compared to the revenue it earns from hardware, but still.

Apple says consumers have other options. They can, for instance, buy another phone that leverages a different payment system. Apple also told The Wall Street Journal that it is "setting industry-leading standards for privacy and security” while providing would-be competitors access to the technology on the same terms as it operates.

  • The pushback echoes Apple's defense in other antitrust cases, including those targeting its App Store: The company often insists that features that appear to create a closed ecosystem funneling consumers through its products are merely security protections.
  • The charges come as Europe is taking a big swing at U.S. tech giants. Yesterday’s "statement of objections" comes almost exactly a year after complaints from the EU about Apple's handling of rival music apps, which also came amid prior antitrust cases and charges.
  • Officials also agreed in March to new competition rules that would require major changes to the App Store and iMessage, as well as services from Google and Amazon.

Apple Pay is under scrutiny at an interesting time. Apple is getting ready to allow iPhone users to receive contactless payments through the built-in NFC technology without additional hardware.

  • Although it would serve as a replacement for Square's dongle and other terminals for cash and credit card payments, it wouldn't directly replace the software and services that Square and others provide.
  • In fact, Apple’s move could embolden Square’s competitors. It picked Stripe and Shopify as initial partners for its new tap-to-pay service. Apple could well sell more iPads as retail registers, with its favored software partners providing the payments plumbing.
  • Meanwhile, NFC is fading as the hot new technology for payments. QR codes first popularized in Chinese payment apps have spread to other systems around the world. Developers don’t need the phone maker’s permission for QR codes, and consumers seem to like them.

That highlights the problems regulators have with keeping up with fast-moving technology. Instead of asking questions about NFC mobile wallets, the EU could be digging into how Apple settles on Stripe and Shopify for early access to its newest tap-to-pay service, or if there are issues discouraging the rollout of QR-code payments. In Washington and Brussels, there’s a tendency to fight the last fight, instead of the next one, and it’s not the big tech companies that pay.

Ben Brody (email | twitter)

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People are talking

Jack Dorsey and other bitcoin defenders pushed back on a letter citing lawmakers’ environmental concerns over crypto:

  • “Education is required to ensure that public officials understand that the digital asset mining sector does not contribute to the environmental issues raised in the letter.”

Coinbase's Brian Armstrong thinks 1 billion people will have used crypto within a decade:

  • "My guess is that in 10-20 years, we’ll see a substantial portion of GDP happening in the crypto economy."

Rob DeSantis doesn’t want Twitter to have a presence in Florida:

  • “That is not something that I’m advocating.”

Nathan Simington doesn’t think the FCC should interfere with Elon Musk’s Twitter grab:

  • “It would be not only unconstitutional, but plainly un-American.”

Making moves

Uber will report earnings tomorrow, and everyone wants to know about how inflation, rising gas prices and the continued spread of COVID-19 variants are hitting the company.

Former Airbnb exec Greg Greeley will become Thrasio’s CEO this summer, and the company will reportedly lay off some employees this week.

Michael Mignano is leaving Spotify. He co-founded podcast distributor Anchor and led Spotify’s podcast tech efforts.

Tej Redkar and Sophie Kitson joined Sumo Logic as chief product officer and chief HR officer, respectively. Redkar comes from LogicMonitor, and Kitson’s from Accenture.

Lorne Schwartz is Libro’s new president. He last held the same role at DataCandy.

In other news

Amazon will cover travel expenses for abortions and other medical treatments, following similar moves from Yelp and other companies responding to new state abortion laws.

Amazon workers in Staten Island won’t form a union after they failed to get enough votes.

Elon Musk doesn’t want much of his own money in Twitter, sources told Reuters. He’s apparently talking with investment firms and other people about chipping into the bid.

Facebook’s podcasting foray is over. Its audio plans had already been losing steam, and now podcasts will be completely off the platform in June.

Meta wants to release four VR headsets between now and 2024, according to The Information. One of them, Project Cambria, is expected to be released in September.

More Apple workers want to unionize, this time at a mall near Baltimore, Maryland. This is the third group of Apple workers to push for unionization.

Grindr user data was gathered and sold for years, sources told The Wall Street Journal. The location data could detail romantic encounters and other personal tracking information.

Google isn’t happy with an EU fine for holding too much power over search, calling the $1.6 billion penalty “criminal.”

Ex-TikTok exec Alex Hofmann launched a dating app called Spark. He created a handful of apps like Wink and Helpline since leaving TikTok a few years back.

The crypto cafe

Randi Zuckerberg wants you to know all about Web3. She launched a new podcast yesterday called “Crypto Cafe with Randi Zuckerberg,” which includes chats with tech futurists and metaverse finatics.

The early Facebook exec will spend the first few episodes talking with crypto leaders like Chris Cantino, Brin Morin and Jaime Schmidt. Like her brother, Zuckerberg’s been pivoting toward crypto and the metaverse since her days at Facebook: She just rolled out a new platform for Web3 leaders and a creator accelerator for women-led crypto businesses.

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Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

Correction: An earlier version of this story included information about Tim Cook joining a university board; it was removed as it is not timely information. This story was updated on May 3, 2022.
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