Apple Pay

Australia’s Anti-Trust Authority Likely To Block Banks’ Collective Bargaining With Apple

It seems Australia’s four biggest banks will not get a crack at collectively bargaining with Apple over access to Apple Pay. The nation’s anti-trust regulator said it is likely to deny the banks’ request to bargain collectively — though the decision is preliminary and could be reversed should the banks persuade the regulator to think different before a final decision is rendered in March.

Under Australian law, bargaining cartels can only be formed with permission from authorities. Losing out with the regulator would deal a blow to banks hoping to bypass Apple Pay and instead roll out their own iPhone-compatible mobile payments apps. Apple has the largest smartphone marketshare among Australian consumers.

Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank Ltd and smaller rival Bendigo and Adelaide Bank Ltd also want to bargain with Apple over charging customers extra fees for transactions made through Apple Pay. Collectively, those banks represent 2/3 of Australia’s credit card market — and success would allow the banks to collectively boycott Apple Pay for three years as a negotiating tactic.

Apple’s argument is that third parties should not have access to its digital wallet technology since such access would undermine their customers’ data security and privacy.

Australian Competition and Consumer Commission Chairman Rod Sims told Reuters that if the ACCC determines that the heart of the banks’ complaint lies with fees, they are likely to lose. If the case is about access to contacts payments technology, the banks may have a stronger chance of victory in March.

Australia and New Zealand Banking Group Ltd is the only one of Australia’s big banks to have a digital wallet agreement with Apple.

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