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Australian regulator denies banks' request to collectively bargain with Apple

The Australian competition watchdog dealt a blow to Australian banks' efforts to band together to collectively bargain with Apple Inc. for its mobile payments system.

The Australian Competition and Consumer Commission said it denied authorization to Commonwealth Bank of Australia, Westpac Banking Corp., National Australia Bank Ltd. and Bendigo & Adelaide Bank Ltd. to collectively bargain with Apple and collectively boycott Apple Pay.

The regulator was not satisfied that the benefits of such an action will outweigh any detriments. The ACCC was also "concerned that the proposed conduct is likely to reduce or distort competition in a number of markets," said Chairman Rod Sims.

The banks had wanted access to Apple's near-field communications antenna, or NFC, in iPhones. Such an access would allow the banks to offer their own digital wallets to iPhone customers in competition with Apple's digital wallet, without using Apple Pay.

The ACCC acknowledged that access to the iPhone NFC controller will likely lead to increased competition in the mobile payment space but there are also significant detriments. Sims said if the applicants were allowed access, it would affect Apple's strategy for mobile payments, impacting how it competes with Google.

The ACCC also noted that it is uncertain how competition may develop in the mobile payment area as the technology is in its infancy and subject to rapid change. Access to the NFC controller will also likely hinder innovation in the market, Sims said.

"Finally, Apple Wallet and other multi-issuer digital wallets could increase competition between the banks by making it easier for consumers to switch between card providers," Sims added.