Australian regulator set to oppose collective bank bargaining on Apple Pay
By Jamie Freed and Byron Kaye
SYDNEY (Reuters) - Australia's antitrust regulator said on Tuesday it is likely to deny four local banks permission to collectively bargain with Apple Inc (AAPL.O: Quote) in relation to its mobile digital payments system.
But the preliminary decision was "finely balanced" and could be reversed if the banks make a convincing case before a final opinion is due in March, Australian Competition and Consumer Commission Chairman Rod Sims told Reuters.
Losing the case would be a setback to the banks' hopes of bypassing Apple's in-house payments system and rolling out their own iPhone versions free of competition from the Silicon Valley giant, which has the biggest smartphone market share in Australia.
Under Australian law, bargaining cartels can be formed as long as they have permission from authorities, and the banks are seeking the ability to offer their own digital wallets in Apple iPhones - the first major challenge to Apple Pay of its kind.
Commonwealth Bank of Australia (CBA.AX: Quote), Westpac Banking Corp (WBC.AX: Quote), National Australia Bank Ltd (NAB.AX: Quote) and smaller rival Bendigo and Adelaide Bank Ltd (BEN.AX: Quote) also want to bargain with Apple over charging customers extra fees for transactions made through Apple Pay.
A successful application would allow the banks - which jointly have two-thirds of the Australian credit card market - to collectively boycott Apple Pay for up to three years as a negotiating tactic.
Apple has argued that third parties should not have access to its digital wallet technology because it would undermine customers' privacy and data security. The company's representatives did not immediately respond to requests for comment on Tuesday.
Apple Pay allows users to register credit cards on devices such as iPhones, and pay for goods and services by swiping the devices over contactless payment terminals. Apple charges card providers for transactions via the service, which it introduced to Australia last year. Continued...