Apple Pay

Apple Wins Collective Bargaining Battle With Australian Banks

The four big Australian banks that were hoping to collectively bargain with Apple over the implementation of Apple Pay will not have an opportunity to do so after a ruling by  the Australian Competition and Consumer Commission.

Specifically, the ACCC noted the collective threat to boycott Apple was “likely to reduce or distort competition.”

The spat stemmed from the banks’ desire to access Apple’s contactless payment technology to enhance the service within their own apps..

Commonwealth Bank, Westpac, National Australia Bank and Bendigo & Adelaide Bank together command around two-thirds of Australia’s credit card market — and none of them allow their cards to work within Apple Pay due to the disagreement over access to the NFC technology.

Collective bargaining could have allowed the banks to push Apple into handing out access to its iPhone technology, given the large share of the market they collectively command.

But the commission ruled that the collective bargaining would have in effect forced Apple into behaving like rival firm Google (Android phones allow contactless payments from within individual apps.)

“It is a tricky issue for a competition regulator to force one competitor to adopt a strategy of the other competitor,” ACCC chairman Rod Sims explained.

They banks can — and likely will — continue to negotiate with Apple individually, but with much less bargaining power than they had hoped for. A single bank can block Apple Pay — but consumers who want it can find a different bank. In fact, there is some evidence this is happening in Australia, according to the BBC, with banks that allow Apple Pay seeing a small pick-up in numbers.

Representatives for the banks said they were “disappointed” by the decision and would review their future strategies.


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