The Australian Competition and Consumer Commission (ACCC) has denied a request to allow five big Australian banks to collectively bargain with Apple Inc. (NASDAQ:AAPL) and collectively boycott Apple Pay.
Under the anti-cartel laws in Australia, the Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank are required to negotiate individually with Apple.
“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 in a statement.
The banks wanted to access the Near-Field Communication (NFC) controller in iPhones, and reasonable access terms to the App Store. This access would enable them to offer their own integrated digital wallets to iPhone customers in competition with Apple’s digital wallet, without using Apple Pay.
“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.
The banks argued that access to the NFC controller on iPhones would enable them to offer competing wallets on the iOS platform which would lead to many public benefits. But the ACCC said that “the likely distortions to and reductions in competition caused by the conduct would also be significant.”
Apple Pay is a mobile payment and digital wallet service that lets users make payments using an iPhone, Apple Watch, iPad or Mac. The service, launched in 2014, is compatible with the iPhone 6, 6 Plus, iPhone 6S, 6S Plus, 7, 7 Plus, iPhone SE, iPad Air 2, iPad Pro and the Apple Watch.
Shares of Apple Inc. (NASDAQ:AAPL) closed down 0.13% on Thursday. The stock is up 24.27% year-to-date. Shares have gained 36.21% during the last 12 months.