ACCC knocks back banks’ anti-Apple ‘cartel’ request … for now


news The Australian Competition and Consumer Commission (ACCC)  has said it has decided not to grant four of Australia’s biggest banks interim authorisation to “collectively bargain” with Apple over the terms of any partnership involving the tech giant’s Apple Pay product.

The ACCC added, however, that at this early stage in the process it is “continuing to assess” the applications for authorisation by the Commonwealth Bank, Westpac, National Australia Bank, and Bendigo and Adelaide Bank.

On 26 July, the banks entered a request for authorisation to form a group – what Apple called a “cartel” in a recent letter to the ACCC – via which they would be allowed to engage in collective negotiation and boycott activities with Apple and with other third-party wallet providers in Australia.

The ACCC said it has considered interim authorisation within a “short timeframe” at the request of the applicants.

“However, given the complexity of the issues and the limited time available, the ACCC has decided not to grant interim authorisation at this time,” ACCC Chairman Rod Sims said. “The ACCC requires more time to consult and consider the views of industry, consumers, and other interested parties.”

In deciding not to grant interim authorisation, the ACCC said it took into account the potential for the decision to affect competition in the market, the level of urgency for the request, any possible harm to the applicants or other parties if the authorisation is granted or denied, and possible public “benefits and detriments”.

“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,” said Sims. “We expect to release a draft decision in October 2016.”

The ACCC’s decision not to grant interim authorisation now is not an indication of the ACCC’s likely final decision, he added.

The banks, along with other participating card issuers, are seeking authorisation to collectively negotiate and boycott on a range of issues.

One of these issues – one that Apple made objection to in its letter – relates to the banks’ ability to use Near Field Communication (NFC) hardware on Apple devices to allow contactless payments to be made through the banks’ own digital wallet products.

Other issues include appropriate industry standards for digital wallets and the banks’ ability to pass on any fees charged by a third-party digital wallet provider.

In its letter to the ACCC, Apple strongly urged the ACCC to reject the request for interim authorisation.

If granted, it said, the request would “harm consumers, lead to less competition and less innovation, and create a troubling precedent”.

The banks’ application for permission to negotiate with Apple as a collective group is aimed to “force Apple and other third party providers” to accept their terms, and allow them to charge consumers choosing to use Apple Pay, the firm said.

Image credit: Apple