Australian banks lose Apple regulatory case - Mobile World Live

Australian banks lose Apple regulatory case

31 MAR 2017

A consortium of Australian banks have been told they are not allowed to collectively negotiate access to Apple’s iPhone’s NFC chip, or boycott the Apple Pay service, by the Australian antitrust regulator.

The decision by the Australian Competition and Consumer Commission (ACCC) brings to an end an eight month row over smartphone payments in the country.

ACCC chairman Rod Sims said while allowing the banks’ request would increase competition in the mobile payments sector, it could also hamper innovation in the overall payments space if banks started favouring the use of smartphones.

He also raised concerns that sharing access would impact Apple’s integrated hardware-software strategy and affect how the company competes with Google.

“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,” Sims said.

Explaining how a decision in favour of the banks could have impacted the relationship between Google and Apple, Sims added: “Apple and Android compete for consumers providing distinct business models.”

“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”.

Bitter row
Today’s judgement brings to an end action first brought in July 2016, when the consortium – made up of some of the country’s largest banks – sought permission to jointly negotiate with Apple on NFC access.

By blocking access to the NFC chip, the banks said Apple was acting anti-competitively. In the group’s original request it wanted to negotiate collective access to the NFC facility and transaction fees.

After a war of words with the handset manufacturer, in February the banks withdrew their transaction fee request to focus solely on the issue of negotiating access to the NFC chip.

If successful, this would have allowed the banks to develop and launch their own iPhone-compatible wallet services.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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