Apple bites back over Australian banks’ “cartel”
You want a piece of me?
You can tell cartels to go to hell if you’re Apple. The firm has responded strongly to three of Australia’s big banks’ plans to team up for negotiation deals on digital wallet access.
According to the Australian Financial Review, the request from the Commonwealth Bank of Australia, National Australia Bank and Westpac to “collectively negotiate over digital wallet access to the iPhone will compromise the handset’s security, reduce innovation and blunt Apple’s entry into the payments market in Australia”.
Apple told the Australian Competition and Consumer Commission (ACCC) that “allowing the banks to form a cartel to collectively dictate terms to new business models and services would set a troubling precedent and delay the introduction of new, potentially disruptive technologies”.
The three banks, with Bendigo and Adelaide Bank, applied in July to collectively negotiate with Apple, which has locked the banks and other third-party providers of digital wallets off the iPhone platform in favour of its own Apple Pay.
In its submission to ACCC, Apple says “providing simple access to the NFC antenna by banking applications would fundamentally diminish the high level of security Apple aims to have on our devices”.
The Australian Financial Review says the banks want to force Apple to accept their terms, including allowing them to charge consumers that choose to use Apple Pay. It says it had “struggled” to negotiate agreements with the other Australian banks, although it is currently in negotiations with some Australian institutions.
Apple told the ACCC that the banks had relied on “innuendo and misstatements” in their submission and “if granted, the request would harm consumers, lead to less competition and less innovation, and create a troubling precedent.”
The tech giant says the ACCC should not provide any interim authorisation this month, and instead should take the six-month statutory period to assess the application properly.
The world spins
On a more cheerful note, there have been several Apple Pay launches this year.
Apple Pay is now available in France – with Visa debit and credit cardholders from Banque Populaire et Caisse d’Epargne (BPCE group) getting immediate access.
One million Visa cardholders in Switzerland got access to the newly launched Apple Pay; and Wirecard is also providing its clients with Apple Pay support.
Apple Pay support is expanding beyond American Express to Visa and MasterCard credit and debit cards from five of Singapore’s major banks. The big banks include POSB, DBS, OCBC, Standard Chartered and UOB.
Apple launched its mobile payment system in China in partnership with state-owned bankcard association, China UnionPay.
UPDATE 19 August 2016
The ACCC has made a decision (of sorts) concerning whether the banks can negotiate as one entity with Apple.
The ACCC has denied the banks’ request and postponed a draft ruling until October.
ACCC chairman Rod Sims says the issues are too complicated to rule on in a limited time, and it needs to investigate its effect on competition.
“The entire ACCC authorisation process usually takes up to six months, including the release of a draft decision for consultation before making a final decision,” Sims says.
“The ACCC’s decision not to grant interim authorisation at this time is not indicative of whether or not a draft or final authorisation will be granted.”
A spokesperson for the banking consortium says a group negotiation would benefit consumers and released a statement.
“This application seeks to ensure that Australian customers are able to choose between different mobile wallets to make payments easily,” the statement says.
“This application has broader industry benefits too. A number of other Australian institutions have supported the ACCC granting the authorisation, including Heritage Bank, Tyro and Indue.”
The saga is not over. More updates as and when they happen.
