ACCC blocks banks’ bid to collectively bargain over Apple Pay

The competition watchdog has denied a bid by Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank and Bendigo and Adelaide Bank to collectively bargain with tech giant Apple over access to its Apple Pay payments platform.

The Australian Competition and Consumer Commission has issued a draft determination “proposing, on balance, to deny” an application for authorisation to allow the banks to form a cartel to negotiate with Apple. A final decision will be made in March.

The ACCC said the banks’ proposals could distort competition between mobile operating systems, reduce competitive tension between banks individually negotiating with Apple, and reduce competition between the banks in the supply of mobile payment services for iPhones.

The banks are now preparing to provide the ACCC with more information about the likely benefits of the collective negotiations in order to convince the regulator to change its mind on the draft decision.

In a statement on Tuesday morning, the banks said they will “continue working with the ACCC to address the issues raised in the draft determination in order to provide competition and choice for the benefit of consumers”.

The banks have waged a bitter war of words with Apple over Apple’s refusal to grant them access to the Near-Field Communication (NFC) controller in an iPhone, which is needed for the banks own digital wallets to communicate with contactless payments terminals. The banks say this is necessary to let their own digital wallets to compete with Apple Pay.

The banks were also unhappy with Apple’s refusal to remove restrictions that prevent the banks passing on fees that Apple charges the banks for use of its digital wallet platform, which includes proprietary security infrastructure which Apple says if safer than Android’s system.

But ACCC chairman Rod Sims said he was not satisfied “that the likely benefits from the proposed conduct outweigh the likely detriments”.

“While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits are currently uncertain and may be limited,” Mr Sims said.


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