According to France’s antitrust authority, digital payment systems established by U.S. tech giants such as Apple and Alphabet’s Google risk strengthening their market dominance by granting them greater control over consumers’ data.
The comments, which are part of a 127-page opinion, come after a one-year investigation into emerging payment innovations and shed light on the watchdog’s perspectives in the area, which has seen a proliferation of mobile banking apps such as Revolut in the United Kingdom and N26 in Germany.
According to the French watchdog, Apple, Google, and Amazon’s payment services have significant competitive advantages due to the huge number of users their sites have attracted and the vast amount of data they have gathered.
They may use this to help assess their users’ financial health and tailor their deals, such as calculating the maximum price a consumer is willing to pay for a product or service.
According to the watchdog, “Near Field Communication” (NFC) technology, the most widely used short-range wireless method for making contactless payments, can also serve as an entry barrier for potential rivals, depending on access granted by mobile manufacturers or operating systems.
Apple Pay is only available on iPhones and is the only method that can take advantage of NFC contactless technology on these devices.
The largest tech companies also have such financial clout, according to the watchdog, that they can spend large amounts to further incorporate payment tools into their processes, increasing the likelihood of customers being locked into their network.
Apple Pay has also been scrutinized by the European Commission, which opened an inquiry last year.
Apple’s demand that software developers sell to consumers using its own in-app payment scheme is being investigated by EU antitrust regulators. They’re also worried that Apple Pay, which debuted in 2014, is the only mobile payment service that can use iPhones’ “tap and go” feature.