Klarna boss questions Apple competitive practices after buy-now pay-later move
The boss of fintech giant Klarna has questioned the competitive practices of Apple after the tech behemoth announced it would push into the buy-now pay-later space this week.
Sebastian Siemiątkowski, who co-founded Swedish buy-now pay-later giant (BNPL) Klarna in 2005, wrote that “plagiarism is the highest form of flattery” after Apple revealed its much anticipated move into the BNPL space earlier this week.
But in an interview to the Sunday Telegraph today, Siemiątkowski questioned Apple’s previous competitive practices in digital payments and said the firm needed to be more “open to competition”.
“I do think there are major issues with someone controlling a massive size of the market and then utilising that to promote their own product without offering other providers to do the same,” he said.
Siemiątkowski added that while he does not think Apple should be blocked from offering BNPL products, it should “consider becoming more of an open player”.
“If you have as strong a market dominance as they do, they need to be more open to competition on their platforms,” he said. “If they are more open they should have the same right to compete as everyone else”.
Siemiątkowski’s comments come after EU regulators last month charged Apple with breaking competition law by restricting rival firms’ access to contactless payment technology.
The UK’s competition watchdog the CMA has also been ramping up scrutiny of Apple’s competitive practices, announcing last month it will launch an investigation into the “effective duopoly” that Apple and Google hold over the mobile ecosystem.
Apple has long been expected to move into the BNPL space but the timing of its announcement comes amid a bruising period for Klarna, after the firm was forced to slash more than 700 of its 7000 strong workforce this month.
Siemiątkowski then came under fire for what was described as a “tone deaf” decision to share a list of laid-off employees who were searching for new jobs, which had originally been published by the workers themselves.
Klarna, which last year earned the crown of Europe’s most valuable startup at $45.6bn, is also now reportedly hurtling towards a so-called ‘down round’ as it looks to raise fresh funding, potentially valuing it as much as a third less than its blockbuster valuation last year, Bloomberg reported.
The increasing investor scepticism comes amid heightened regulatory scrutiny of BNPL products in Klarna’s key markets, with the Financial Conduct Authority set to swoop on the sector in the UK this year.
The watchdog is waiting for the results of a consultation which closed in early January, which a Treasury spokesperson told Morning Wire last month would be published in the “coming weeks”.