Delay in banks vs Apple fight

ACCC agrees to give banks more time to respond to Apple

The Australian Competition and Consumer Commission (ACCC) has pushed back the timeframe for releasing a draft decision in a stoush between some of Australia’s biggest banks and Apple.

The fight centres on whether the group of banks will be able to band together in order to negotiate the conditions governing their use of mobile wallet platforms such as Apple Pay.

The competition regulator says it now expects to issue in November a draft determination on the application by the group of banks, which that are seeking the right to form a cartel for the purposes of negotiating with Apple and a number of other third party mobile wallet providers.

The applicant banks — Bendigo and Adelaide Bank, the Commonwealth Bank of Australia, National Australia Bank and Westpac — earlier this week applied for an extension to the ACCC deadline.

A letter from Gilbert + Tobin on behalf of the applicants states that a number of submissions, including a substantial submission from Apple, were received after the initial ACCC deadline of 18 August.

“These submissions raise significant questions of fact and law and in some instances appear to misconstrue many of the key elements of the application for authorisation and the process it envisages,” the letter states.

“Apple has also made statements as to its intentions for future conduct that have implications for the factual and counterfactual scenarios that the ACCC must evaluate. In this context, the applicants wish to ensure that the ACCC is presented with all key factual, legal and economic evidence before making its draft determination.”

The applicants requested an extension until 30 September for submissions to be made “to allow them to fully address the issues that have been raised in interested parties’ submissions”.

The ACCC has agreed to the request. The deadline for the application remains 26 January, but the ACCC can extend the normal six-month timeframe by an additional six months if it has released a draft determination and the applicant agrees to an extension (the applicants have indicated they will agree to an extension).

The banks lodged their application with the ACCC in July. The applicants named Apple Pay, Samsung Pay and Google Pay as examples of digital wallet platforms whose operators are in a position to negotiate terms for use of their mobile wallets that are “likely to result in reduced competition and innovation, and increased risk in the security and transparency of mobile payments.”

One issue cited by the applicant banks is Apple’s refusal to allow third parties to employ the iPhone’s NFC capabilities for mobile payments. Currently, only Apple Pay can take advantage of the smartphone’s NFC antenna.

However, Apple has said that even if the ACCC authorises collective negotiations over the use of the Apple Pay platform, the iPhone maker “will not and cannot” agree to the conditions likely to be sought by the banks.

Apple will not “undermine the availability, security and privacy our customers expect when using Apple devices to make payments,” the device maker has argued.

In addition to access to the NFC antenna, the banks are likely to seek the right to pass on to customers fees they are charged by Apple for use of the platform and to make Apple agree to additional security guidelines.

Currently only ANZ and American Express support Apple Pay in Australia.

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Tags anz bankWestpaccommonwealth bankAndroid PayCommonwealth Bank of AustraliaApple PayBendigo and Adelaide Bank LtdNational Australia BankAppleBendigo Bankmobile payments

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