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BREAKING NEWS: ACCC Deny Banks Over Apple Pay

Despite narrowing their submission last month, the coalition of Australian banks (NAB, Westpac, Commonwealth and Bendigo Bank) determined to wrest control over the iPhone’s NFC chip from Apple have been denied authorization by the ACCC to collectively bargain with the tech company.

“The ACCC is not satisfied, on balance, that the likely benefits from the proposed conduct outweigh the likely detriments. We are concerned that the proposed conduct is likely to reduce or distort competition in a number of markets,” ACCC Chairman Rod Sims said.

The regulator say that they reached their determination through consultation with consumers, financial institutions, retailers and technology companies.

“While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits would be outweighed by detriments,” Mr Sims said.

In a statement, the regulator admitted that while providing the banks access to the iPhone NFC controller is likely to lead to increased competition in mobile payment services and that this was a significant public benefit. However, they considered the risks associated with the likely distortions to and reductions in competition caused by the conduct to be too high.

Specifically, Sims said that “If the Applicants are successful in obtaining NFC access, this would affect Apple’s current integrated hardware-software strategy for mobile payments and operating systems more generally, thereby impacting how Apple competes with Google.”

“Second, digital wallets and mobile payments are in their infancy and subject to rapid change. In Australia, consumers are used to making tap and go payments with payment cards, which provide a very quick and convenient way to pay. There is also a range of alternative devices being released that allow mobile payments; for example, using a smartwatch or fitness device. It is therefore uncertain how competition may develop.”

He says that access to the NFC in iPhones for the banks could artificially direct the development of emerging markets to the use of the NFC controller in smartphones, hampering potential innovations occurring around different devices and technologies.

“Finally, Apple Wallet and other multi-issuer digital wallets could increase competition between the banks by making it easier for consumers to switch between card providers and limiting any ‘lock in’ effect bank digital wallets may cause,” Mr Sims said.

You can read the full determination for yourself here.

Both Apple and the banks have yet to make a statement on the ruling.

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