Financial technology companies from South Korea are determined to take Apple to court, as the company is blocking rivals from using near field communication (NFC) in its mobile devices.

The case will be filed at the Korean Fair Trade Commission (KFTC), where fintech ventures aim to prove that Apple's lockdown of its programming interface (API) denies other companies the use of NFC. The local fintech companies argue that this creates an unfair advantage to the iOS developer when it comes to financial services.

The plaintiffs are alleging that Apple's policy denies them access to NFC business opportunities such as user identification, simple mobile payments and transportation cards. The issue might generate a lot of media attention, as the fintech companies say they are ready to take Apple to court for barring their access to NFC by keeping its own API under lock and key.

Korean Enterprises

Insiders familiar with the matter say that names such as Interpay, Korea NFC, Cashbee and Kona I met on Sept. 9 to discuss the opportunity of opening up a legal case against Apple, in the hope of getting access to NFC support.

The Korean fintech firms will receive legal advice from the Korea Fintech Association.

Apple offers NFC support on its smartphone models (starting with the iPhone 6), but requires that the feature be used exclusively with Apple Pay. This means that Apple's lockdown on its API is denying Korean customers' access to NFC services such as mobile payment to various vendors, paying for buses and subways or identification of credit card users.

According to the fintech firms from South Korea, Apple restricts consumers' rights and effectively sabotages services and business opportunities for businesses and clients.

Hwang Seung-ik, the helm of Korea NFC, explains that customers have the elementary right to enjoy a variety of services that use NFC.

"Services such as paying fares for buses and subway, a safe tax service and an NFC-based police report service [are unavailable to users of iPhone in Korea]," he notes.

It should be noted that a similar current of opinion is starting to form in Australia, where Apple is also chastised for keeping its API for NFC outside of developers' reach.

The Australian Precedent

Back in July, Apple summoned in court in Australia by an alliance made up of four banks. The financial institutions took Apple before the Australian Competition and Consumer Commission (ACCC) in a similar case. The banks asked the tech company to raise the gates on its API for NFC to ensure that a more flexible market for mobile wallets can come into being.

Should the Korean fintech firms proceed to lock horns with Apple to open its API for NFC, a legal conflict is probable to flare up, with multiple institutions joining the fintech enterprises.

People familiar with the matter note that the ventures are determined to present their case in front of the KFTC. The second meeting of the fintech companies is expected to take place at September's end.

Hwang is confident that the cooperation between the fintech firms, the Korea Communications Commission and the KFTC will lead to Apple "opening the API to NFC."

ⓒ 2021 All rights reserved. Do not reproduce without permission.