The UK's Competition and Markets Authority (CMA) says it will take action to ensure Apple opens up restrictions on fintechs offering their own digital wallets on iPhones.
The move comes as the CMA confirms that it is planning to designate both Apple and Google with ‘strategic market status’ (SMS) in their mobile platforms, including operating systems, app stores and mobile browsers. With the status confirmed, the watchdog has published roadmaps of potential actions concerning the firms in a bid to boost competition.
For Apple, this includes addressing its longstanding restrictions that prevent rivals from competing with its wallet. The CMA says it will focus on interoperability to take on the "restrictions on functionality to enable UK fintechs to bring innovative digital wallets to market".
Apple promised to open up the NFC chip technology that enables iPhone users to make contactless payments to third-party providers in a host of countries - including the US and UK - last year, but said it would also charge associated fees. That move came in the face of regulatory pressure in the US and in the wake of a deal with the EC to resolve an antitrust case.
In the UK, stakeholders have previously told regulators that NFC access is not the only issue with Apple and Google wallets, noting that the US giants benefit from being able to control their own mobile ecosystem, enabling them to steer consumers to use their own offerings through pre-installation.
Stakeholders also noted the lack of competition between payment systems within wallets: the main pass-through wallets don’t currently offer a choice beyond cards, limiting the potential for account-to-account payments, or stablecoins or a future CBDC.
More broadly, the CMA says that fintech is a crucial part of the UK app economy, which could benefit from transparent App Store review processes and rankings an the ability to ‘steer’ users out of app stores, for example to make purchases.
Sarah Cardell, chief executive, CMA, says: "Apple and Google’s mobile platforms are both critical to the UK economy - playing an important role in all our lives, from banking and shopping to entertainment and education. But our investigation so far has identified opportunities for more innovation and choice.
"The targeted and proportionate actions we have set out today would enable UK app developers to remain at the forefront of global innovation while ensuring UK consumers receive a world-class experience."