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German legislators have rushed new legislation through that could force Apple to provide access to its NFC chip, allowing competitors to provide their own mobile payment platforms on the iPhone and Apple Watch.
In a late-night session on Wednesday, a German parliamentary committee suddenly voted to pressure Apple into to offering Apple Pay to rival providers in Germany.
It came in the form of an amendment to an anti-money laundering law that was adopted late Thursday and is set to come into effect early next year. While the law didn't specifically name Apple, it would require any operator or an electronic money infrastructure to offer access to rivals at a reasonable fee.
The legislation reflects Germany's increasing willingness to loosen U.S. technology companies' control on technology products and services.
"We are surprised at how suddenly this legislation was introduced," Apple said of the matter. "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 had told Reuters that Chancellor Angela Merkel's office had pushed for the committee to withdraw the amendment.
The Chancellor's move had raised concerns from Germany's Social Democratic Party.
"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."
Apple has also been targeted by an anti-competitive investigation by the European Commission regarding the choice to limit the NFC chip to Apple Pay.