News & Insights

The ACCC has recently issued its final decision which denies Australian banks permission to collectively bargain with Apple for access to its Near-Field Communication (NFC) technology.

Banks wanting to collectively bargain with Apple included Commonwealth Bank, Westpac, NAB, Adelaide Bank and Bendigo Bank (Banks). The ACCC’s decision means that customers of these Banks will not be able to use touch-and-go payments using iPhone devices until each of the banks individually come to an agreement with Apple.

The Banks’ collective bargaining request was sought to access the NFC controller in iPhones and the App Store. This access would have allowed the Banks to offer their own digital wallets through the iPhone in competition with Apple’s own digital wallet, Apple Pay. Digital wallets are essentially software alternatives to the traditional leather wallet, whereby bank account details can be linked to (for example) the iPhone, which can then be used for electronic transactions.

The ACCC’s position

The ACCC’s position on the Banks gaining access to the iPhone NFC controller is that whilst this may lead to increased competition in mobile payment services (a public benefit), it would not outweigh the public detriments. The potential detriments identified by the ACCC included:

1. Providing access to the NFC would affect Apple’s existing integrated hardware software strategy for mobile payments as well as their other operating systems, and this would impact on how Apple competes with Google;

2. Access to the NFC in iPhone would be likely to hamper innovation around alternative technologies for mobile payments generally, as well as detracting from existing alternative devices such as smartwatches or fitness devices;

3. By supporting other multi-issue digital wallets, there would be greater competition between the banks allowing consumers to switch between card providers and limiting any ‘lock in’ effect.

The Banks’ position

The Banks argued that access to the NFC controller on iPhone would enable them to offer competing wallets on an iOS platform, leading to the following consumer benefits:

1. Increased competition and choice in digital wallets;

2. Increase innovation and investments in digital wallets and applications that use NFC technology;

3. Increased consumer confidence creating greater adoption of mobile payment technology.

It will be interesting to see how the Banks respond to this decision and whether, like ANZ, they will approach Apple individually to gain access to its NFC technology.

Macpherson Kelley regularly advises on competition issues, including the collective bargaining process.  For further information, please contact Paul Kirton or Kelly Dickson.