* Setback for banks looking to roll out their own digital
* Decision finely balanced, could be reversed - regulator
* Final ruling to be made by March
(Recasts, adds regulator comment that decision finely balanced)
By Jamie Freed and Byron Kaye
SYDNEY, Nov 29 Australia's antitrust regulator
said on Tuesday it is likely to deny four local banks permission
to collectively bargain with Apple Inc 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
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, Westpac Banking
Corp, National Australia Bank Ltd and smaller
rival Bendigo and Adelaide Bank Ltd 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
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.
In their application, the banks argue that there is an
information imbalance weighted in Apple's favour due to the
secret nature of the terms Apple has agreed with competitors
over the use of Apple Pay, including fees.
Sims said that if the ACCC determines that the heart of the
banks' complaint lies with fees, then it would be difficult for
them to win the case. But if it is more about access to Apple's
contactless payment technology, then they had a stronger case.
A representative for the banks behind the application, Lance
Blockley, said there would be effectively no competition against
Apple for mobile payments on the iPhone if the draft
determination stood. The banks would continue to argue their
case with the ACCC, he said.
Australia and New Zealand Banking Group Ltd is the
only one of Australia's "Big Four" banks to have a digital
wallet agreement with Apple, betting that being one of the first
to offer the service would help bring in more customers.
(Reporting by Jamie Freed and Byron Kaye; Editing by Stephen
Coates and Edwina Gibbs)