Australia sides with Apple in bank dispute over mobile wallet

Australia's government says the country's large banks cannot collectively bargain with Apple over terms of support for Apple Pay, ending a public battle between Apple and the banks that has lasted at least a year.

The Australian Competition and Consumer Commission formally denied the Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank to jointly negotiate with Apple and collectively boycott Apple Pay.

"The ACC is not satisfied, on balance, that the likely benefits from the proposed conduct outweigh the likely detriments," said ACCC Chairman Rod Sims in the ACCC's statement.

Michael Short/Bloomberg

The banks wanted authorization to pool together to bargain with Apple over access to Near Field Communication technology in the iPhone and terms to access the App Store. This would allow the banks to develop their own contactless mobile payment apps for iPhone users in competition with Apple without necessarily using Apple Pay. A loss for Apple could have encouraged collaborative negotiations among banks in other markets, particularly banks that are concerned about Apple's fees and general lack of openness with its technology.

The ACCC was not expected to rule in the banks' favor, mostly because giving the country's largest banks such leverage could give the banks an advantage in other issues, such fees and rates.

"We are concerned that the proposed conduct is likely to reduce or distort competition in a number of markets," said Sims in the ACCC statement. While the big banks battled the government and Apple, Apple Pay continued to make gains in Australia with other financial institutions and smaller banks.

The banks jointly expressed disappointment with the government's ruling.

"This case has always been about consumer choice. The applicants made this application to seek to ensure they could participate in the future of mobile wallets, and not have the course of development for mobile wallets in Australia dictated by a single overseas corporation," said Lance Blockley, a spokesperson for the banks, in a statement to the media.