ACCC proposes to deny authorisation for banks to collectively bargain with and boycott Apple on Apple Pay

The Australian Competition and Consumer Commission has issued a draft determination proposing, on balance, to deny authorisation to the Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank (the banks) to collectively bargain with and boycott Apple on Apple Pay.

On 26 July 2016, the banks sought authorisation on behalf of themselves and other credit and debit card issuers to engage in limited collective negotiation and limited collective boycott conduct. The banks have since clarified that they only wish to collectively negotiate with Apple in relation to specified issues regarding NFC access on iPhones, reasonable access to the App Store for their digital wallets, and the ability to pass through Apple Pay fees.

On 19 August 2016 the ACCC decided not to grant interim authorisation to the applicants.

Currently only consumers with eligible payment cards issued by ANZ and American Express are able to use Apple Pay. Cuscal Ltd, on behalf of 31 issuers, recently reached agreement with Apple to offer Apple Pay.

The banks sought authorisation to bargain with Apple on two key issues:

• access to the Near-Field Communication (NFC) controller in iPhones. Such access would enable the banks to offer their own integrated digital wallets to iPhone customers in competition with Apple’s digital wallet without using Apple Pay
• removing restrictions Apple imposes on banks preventing them from passing on fees that Apple charges the banks for the use of its digital wallet.

“This is currently a finely balanced decision. The ACCC is not currently satisfied that the likely benefits from the proposed conduct outweigh the likely detriments,” ACCC Chairman Rod Sims said in a statement.

The banks argue that being able to engage in the proposed conduct will increase the likelihood of being able to offer competing wallets on the iOS platform and pass through Apple fees, which would lead to the following public benefits:

• increased competition and consumer choice in digital wallets in Australia
• increased innovation and investment in digital wallets and other mobile applications using NFC technology
• greater consumer confidence leading to increased adoption of mobile payment technology in Australia
• increased pricing efficiency in digital wallets.

“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 are currently uncertain and may be limited,” Mr Sims said.

The applicant banks have yet to reach agreement with Apple over deals to enable their cardholders to use Apple Pay. Apple does not allow the banks, or any entity, direct access to the NFC to allow them to offer their own integrated digital wallet to iPhone users.

“However, banks can already offer competing digital wallets on iPhones without direct access to NFC, through their own apps using Apple Pay payment technology, or using NFC tags. Banks can also offer digital wallets on the Android platform,” Mr Sims said.

“Digital wallets and mobile payments are in their infancy and subject to rapid change. In Australia, consumers are used to making tap and go payments with payment cards, which provide a very quick and convenient way to pay. It is therefore uncertain how competition may develop with the availability of mobile payments and possible future innovations.”

The ACCC is concerned that the proposed conduct could reduce or distort competition in a number of markets.

The conduct would reduce the competitive tension between the banks individually negotiating with Apple, which could reduce competition between the banks in the supply of mobile payment services for iPhones.

“Apple Wallet and other non-bank digital wallets could represent a disruptive technology that may increase competition between the banks by making it easier for consumers to switch between card providers and limiting any ‘lock in’ effect bank digital wallets may cause,” Mr Sims said.

There may also be detriments to competition in digital wallets arising from the proposed conduct. Authorisation would allow the banks to agree not to sign up to Apple Pay for three years. This is a significant period of uncertainty and would result in decreased choice for consumers whose banks engage in this conduct.

The ACCC considers that the conduct could also distort competition between mobile operating systems. Apple’s iOS platform is a differentiated offering that competes globally against other operating systems, such as Android. One of the features each system provides to consumers is mobile payment services and digital wallets. To the extent that the proposed conduct leads to an alteration of the offering that Apple is able to make available on the iOS platform, the proposed conduct distorts competition between these operating system providers.

The ACCC is seeking submissions on its draft determination before making a final decision.

Source: Australian Competition and Consumer Commission

MacDailyNews Take: Dear Aussie banks: No, you cannot have access to iPhone’s NFC chip. Beyond the competitive issues cited above, protecting iOS users’ security is of paramount importance.


Australian banks dismiss Android NFC past in Apple Pay negotiations – November 14, 2016
Australian banks accuse Apple of anti-competitive behavior, want access to iPhone’s NFC chip to take on Apple Pay – July 28, 2016
ANZ welcomes Apple Pay in Australia with a funny new TV ad – May 5, 2016
Apple expands Apple Pay in Australia with ANZ bank deal – April 28, 2016

[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]


  1. There’s no way that Apple could risk allowing any third party to have access to the NFC elements of IOS. If the banks wrote their own software and it turned out that it wasn’t totally secure, the headlines all around the world would be about security problems with iPhones payments, not security problems with third party software running on iPhones.

    Apple Pay is well established, reliable and proven to be secure. What the Australian banks really want is to grab a cut of the transaction fees for themselves and to harvest as much data as possible from their customers. They are not acting in the interests of their customers at all.

    This case is about giving those Australian banks permission to bargain collectively with Apple. There is nothing to stop individual banks choosing to sign up to Apple Pay, just as the Australia and New Zealand Banking Group have already done. There is talk of those banks boycotting Apple Pay for three years and I have no doubt that Apple will wait for as long as it takes for them to eventually get on board. Compromising security is simply not an option for Apple.

    1. What nonsense. Nobody blames Apple for insecure apps. There has been thousands of insecure apps over time, and we all rightly blame the writer of the appl.

      Apple’s behavior is anti-competitive and not letting the phone OWNER use the NFC hardware in the manner that they like.

      I might add that it would be reasonable for Apple to restrict NFC access to bona fide banks and other creditable organisation, but this blanket ban is just Apple making money from their ability to stop users using their own hardware.

  2. Consumers don’t want a bunch of different wallets for their devices. They want one wallet to handle all of their transactions. Each bank has the option to support Apple Pay or not. What the ACCC is doing appears to be collusion which is an anti-competitive practice.

  3. “The banks” in Australia remind me of the stick-up-their rectum media oligarchy (whom I was just insulting in another post). Their dedicated, stubborn, customer-abuse and determination to make iOS gear insecure for the sake of their greed drags on and on and on . . .

    My usual term for this behavior: Biznizz Bozozity.

  4. If this resistance by Australian Banks is causing iPhone sales to lag vs their Android counterparts, wouldn’t it be in Apple’s interest to waive fees to banks or allow them to pass the cost through, at least for a few years to get enough people on Apple Pay in Australia?

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