ACCC knocks back banks’ Apple Pay bargaining bid
(30 November 2016 – Australia) Australia's consumer regulator is expected to deny four Australian banks permission to collectively bargain with Apple for access to the technology giant’s mobile payments system, Apple Pay.
However, Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims told reporters that the initial decision was "finely balanced", leaving open the possibility of reversing it should the banks convince the regulator before the March decision.
Losing the case would be a setback to the banks' hopes of bypassing Apple's in-house payments system and rolling out their own iPhone versions free of competition from the Silicon Valley giant, which has the biggest smartphone market share in Australia.
Under Australian law, bargaining cartels can be formed as long as they have permission from authorities, and the banks are seeking the ability to offer their own digital wallets in Apple iPhones - the first major challenge to Apple Pay of its kind.
Commonwealth Bank of Australia (CBA), Westpac Banking Corp (WBC), National Australia Bank (NAB) and Bendigo and Adelaide Bank also want to bargain with Apple over charging customers extra fees for transactions made through Apple Pay.
A successful application would allow the banks to collectively boycott Apple Pay for up to three years as a negotiating tactic.
Apple has argued that third parties should not have access to its digital wallet technology because it would undermine customers' privacy and data security. The company's representatives did not immediately respond to requests for comment on Tuesday.
In their application, the banks argue that there is an information imbalance weighted in Apple's favour due to the secret nature of the terms Apple has agreed with competitors over the use of Apple Pay, including fees.
Sims said that if the ACCC determines that the heart of the banks' complaint lies with fees, then it would be difficult for them to win the case. But if it is more about access to Apple's contactless payment technology, then they had a stronger case.
A representative for the banks behind the application, Lance Blockley, said there would be effectively no competition against Apple for mobile payments on the iPhone if the draft determination stood. The banks would continue to argue their case with the ACCC, he added.
ANZ Bank is the only one of Australia's "Big Four" to have an agreement with Apple.
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