ACCC rejects big banks' collective bargaining plea

The efforts of several of Australia's biggest banks to gain unprecedented access to the digital payment chip on Apple's iPhone had been stymied by the Australian competition watchdog, Australian Competition and Consumer Commission.

With banks and technology giants seeking to dominate the market for digital wallets, Westpac, Commonwealth Bank, National Australia and Bendigo and Adelaide Bank had approached regulators for permission to team up in their negotiations over the digital payment service, Apple Pay.

Today, the Australian Competition and Consumer Commission rejected the banks' request to launch a collective negotiation and a boycott of Apple Pay, in what it said was a "finely balanced" draft decision. The regulator would make a final ruling in March.

According to commentators, the rejection marked the first attempt of bankers to apply additional negotiating pressure to Apple over its payment service, which was competing with  banks for about $2 billion of Australian credit card fees.

Banks fear that they will not be able to access touch-and-go payments on consumers' iPhones until each bank reached an agreement with Apple individually, unless the ACCC changed its mind in its final determination and a group deal was struck.

The banks have been seeking an exemption from anti-cartel laws to bargain as a group over use of Apple Pay.

The banks were interested in gaining access to the "near-field communication" (NFC) controller within iPhones, reasonable access to the App Store for their digital wallets and the ability to negotiate around passing on the fees charged by Apple for user of the payment system to their customers.

The lenders had contended that the lack of access to the NFC could stifle the development of "digital wallets" that might compete against Apple Pay.

Apple slammed the banks' concerns over its iPhone payments system saying a cartel would stifle innovation.

"If the draft determination of the Australian competition regulator stands, effectively there will be no competition against Apple for mobile payments on the iPhone," said payments specialist and applicant bank spokesperson Lance Blockley, reported.