DOJ says Apple’s ‘complete control’ over tap-to-pay transactions stops innovation, cements its monopoly

In its wide-ranging antitrust complaint against Apple and its iPhone business, the U.S. Justice Department takes specific aim against Apple’s massive financial business, specifically how it uses Apple Pay to block competition and make billions of dollars a year in the process.

The DOJ alleges that Apple is not only stifling competition among payment services, but it is also potentially stifling innovation, since the fees that banks and others fork out to play with Apple Pay make them less inclined to develop other kinds of services that might rival Apple.

Apple Pay is no stranger to regulatory controversy. In 2020, the European Commission opened an antitrust investigation into it. And in January 2024, perhaps with a sober regard of the other looming regulatory battles it would be facing this year, Apple finally offered some concessions, where it would allow third parties access to its NFC and related technology to build their own tap-to-pay payment services to bypass Apple Wallet and Apple Pay. (Apple’s offer is still being evaluated.)

Interestingly, although Europe has been a hotbed for Apple antitrust action — just earlier this month the EU fined Apple almost $2 billion for breaching antitrust rules in music streaming — that Apple Pay case was the only mention of European activity in the nearly 90-page DOJ complaint.

PayPal — the payments behemoth that has substantial businesses in mobile transactions and point-of-sale technology — was apparently instrumental in the original EU complaint around Apple’s payment monopoly. Contacted today about the DOJ compaint in the U.S., a spokesperson for PayPal said the company declined to comment. (It’s certainly keeping a close eye on the proceedings.)