ACCC won’t take action in banks’ Apple Pay fight — yet

Draft decision expected in October

The Australian Competition and Consumer Commission says it is “continuing to assess” an application lodged with the body by a group of banks that seek the right to collectively negotiate with, and potentially collectively boycott, mobile wallet providers including Apple.

The ACCC said it would not grant an interim authorisation sought by the banks due to the “complexity of the issues and the limited time available”.

“The ACCC requires more time to consult and consider the views of industry, consumers, and other interested parties,” the chairperson of the competition watchdog, Rod Sims, said in a statement.

The Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank last month lodged their application, which argues that some third party wallet providers “by reason of their scale and influence, combined with their control of key mobile hardware and/or operating systems, could be in a position to negotiate terms that would be likely to result in reduced competition and innovation, and increased risk in the security and transparency of mobile payments.”

The application names Apple Pay, Google Pay and Samsung Pay and cites as an example of uncompetitive behaviour Apple’s refusal to allow third-party payment services to access the Near Field Communications capabilities of the iPhone. NFC can be used for contactless payments at retailers.

The application has received support from Tyro and Heritage Bank.

A spokesperson for the applicant banks said they “have been in consultation, and will continue to be in consultation with the ACCC up until the final determination is made”.

“This application seeks to ensure that Australian customers are able to choose between different mobile wallets to make payments easily,” the spokesperson said. “This application has broader industry benefits too. A number of other Australian institutions have supported the ACCC granting the authorisation, including Heritage Bank, Tyro and Indue.”

In its response lodged with the ACCC, Apple has rejected the banks’ arguments.

“Apple has struggled to negotiate agreements with the Australian Banks and only recently signed an agreement with ANZ,” Apple said.

ANZ is the only one of Australia’s big four banks to so far strike a deal to offer Apple Pay to its customers. The other banks “based on their limited understanding of the offering... perceive Apple Pay as a competitive threat”, Apple argued.

The goal of the banks banding together “is to force Apple and other third party providers to accept their terms, allow them to charge consumers that choose to use Apple Pay, and force Apple to undermine the security of its mobile payment service by opening access to the NFC antenna, placing at risk the consumer experience of a simple, secure, and private way to make payments in store, within applications or on the web.”

“The entire ACCC authorisation process usually takes up to six months, including the release of a draft decision for consultation before making a final decision,” Sims said today.

“We expect to release a draft decision in October 2016. The ACCC’s decision not to grant interim authorisation at this time is not indicative of whether or not a draft or final authorisation will be granted.”

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Tags Appleanz bankBendigo Bankmobile paymentsWestpacCommonwealth Bank of AustraliaApple PayBendigo and Adelaide Bank LtdNational Australia Bank

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