The EU antitrust investigation of Apple Pay boils down to this: does Apple have the right to be the gatekeeper of its Embedded Secure Element (eSE) in the Apple A/S Series chip, does Apple ‘own’ it? As of iOS 13 any Apple Pay eSE transaction that involves payments, transit, identity cards and contactless passes requires a PassKit NFC Certificate.
Apple has put massive effort and resources into making Apple Pay an easy seamless experience. Users don’t have to think about EMV, FeliCa, MIFARE, or NFC flavors. It just works. The price for using this is that 3rd party card and pass developers have to obtain a NDA PassKit NFC Certificate, reside in Wallet, and share a transaction cut with Apple. Apps are free to use iOS 13 Core NFC tag reading enhancements but NFC eSE transactions are not allowed, unless they have inner sanctum NFC Certificate access.
Australian banks fought Apple Pay in 2017 and complained to the Australian Competition and Consumer Commission (ACCC), demanding that direct NFC access for their apps is a ‘right’ but lost. The EU antitrust investigation will likely follow a similar path and attempt to force Apple to: 1) allow apps to access the eSE for payment transactions without using Apple Pay or Wallet, 2) lower fees for the 3rd party players who use Apple Pay.
We’ll see how it plays out. We’ll also see if Apple has any iOS 14 Apple Pay changes in store. I agree with Junya Suzuki’s spot take, who’s knowledge of the payments market, the players and the technology is second to none, that the EU would never demand the same thing of Samsung or Huawei that they are demanding from Apple. In other words, politics.