Commonwealth Bank has urged the government to quickly grant the RBA new powers to regulate Apple as it wades deeper into the Australian financial services industry.
The banking giant lays out a litany of potential doom scenarios in a submission to the Senate economics committee published, should the federal government not take a “fast follower” approach to Apple’s disruptive approach.
These potential pitfalls include “anticompetitive self-preferencing, anticompetitive tying, and unreasonably preventing consumer switching”.
“In ensuring platforms that provide financial services in Australia are appropriately regulated, time is of the essence,” CBA said.
“Creating an environment where digital platforms are able to avoid regulation could see a hollowing out of domestic industry.”
Central to CBA’ argument is Apple’s near field communication chip on its iPhone, which Apple currently uses to act as a gatekeeper, forcing banks to go through Apple Pay, Apple’s digital wallet, to make “tap and go” payments directly.
Banks pay a fee to Apple to use this technology, uptake of which is growing faster in Australia than in the rest of the world. CBA argues third-parties should have “reasonable and equivalent” access to this NFC technology without paying a fee.
“The government’s announcement that digital wallets would be part of any new payments regulatory framework was encouraging and could go a long way to achieving this outcome,” the bank noted.
The bank also pointed to findings by the Centre for Economic Policy Research that showed 11 per cent of the big tech company’s revenue is garnered through financial services.
“Whether the speed with which some digital platforms are expanding into the provision of financial services will provide a net benefit to Australian consumers and the economy in the medium to long term will in part depend on how and when the government responds.
“As with media bargaining, Australia can and, given adoption rates, should lead in regulating platforms that choose to provide financial services to ensure that consumers are properly protected, and financial stability is maintained.”
