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Apple warns of risks from German law to open up mobile payments

Apple warns of risks from German law to open up mobile payments
FILE PHOTO: The Apple Inc. logo is seen hanging at the Apple store on 5th Avenue in Manhattan, New York, U.S., October 16, 2019. REUTERS/Mike Segar -
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Mike Segar(Reuters)
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By Holger Hansen

BERLIN (Reuters) – Apple <AAPL.O> said on Friday moves in Germany to force it to open up its Apple Pay mobile payments system to rivals could hurt data protection and the security of financial information.

A German parliamentary committee unexpectedly voted in a late-night session on Wednesday to force the tech giant to open up Apple Pay to rival providers in Germany.

This came in the form of an amendment to an anti-money laundering law that was adopted late on Thursday by the full parliament and is set to come into effect early next year.

The legislation, which did not name Apple specifically, will force operators of electronic money infrastructure to offer access to rivals for a reasonable fee.

The law highlights growing desire in Germany for tighter regulation of U.S. technology companies.

Apple Pay, which lets people pay with their iPhones, is a fast growing area of the company’s business, one which threatens to undermine traditional banks’ long-standing dominance of retail payment systems.

“We are surprised at how suddenly this legislation was introduced,” Apple said on Friday. “We fear that the draft law could be harmful to user friendliness, data protection and the security of financial information.”

A person close to the government coalition said Chancellor Angela Merkel’s office had pushed for the committee to withdraw the amendment.

“It’s quite unusual for the Chancellor’s office to try and stop something in the last minute,” said Jens Zimmermann, a senior lawmaker from the Social Democrats (SPD), junior coalition partners to Merkel’s conservatives.

“It would be astonishing if they let themselves be reined back by an American company,” he added. “We want fair competition between payment providers.”

(Additional reporting by Joern Poltz, writing by Thomas Escritt. Editing by Jane Merriman)

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