BEN Bendigo And Adelaide Bank Limited

   By Rob Taylor 
 

CANBERRA, Australia--The competition watchdog has blocked a bid by some of Australia's largest banks to collectively bargain and boycott cooperation with tech giant Apple (AAPL) over use of its Apple Pay payments platform.

The Australian Competition and Consumer Commission said it wasn't satisfied the benefits were big enough to justify finding in the banks' favor. "We are concerned that the proposed conduct is likely to reduce or distort competition in a number of markets," Chairman Rod Sims said Friday.

Several of Australia's biggest banks--including Commonwealth Bank of Australia (CBA.AU), Westpac Banking Corp. (WBC.AU), National Australia Bank Ltd. (NAB.AU) and Bendigo and Adelaide Bank Ltd. (BEN.AU)--wanted permission to bargain with Apple for access to the Near-Field Communication controller, or NFC, in the company's iPhones, as well as reasonable access terms to the App Store.

The four banks collectively represent almost three-quarters of Australian debit and credit cardholders that could be used for Apple Pay and had argued the tech company imposed prohibitive fees and restrictions around the technology. Apple wasn't immediately available for comment.

Another major lender, Australia and New Zealand Banking Group (ANZ.AU), reached an agreement with Apple last year to use the platform.

A 'digital wallet' is an app on a mobile device that can provide several of the same functions as a physical wallet, including the ability to make payments and storing information such as loyalty or membership cards. A 'mobile payment' is a payment made in-store using a digital wallet.

The watchdog last November issued a draft determination proposing to deny the banks, before making a final ruling on Friday. The banks have argued access is required to enable them to offer their own integrated digital wallets to iPhone customers in competition with Apple, without using Apple Pay.

In their submission to the competition watchdog, they said access to the NFC controller would bring increased competition and consumer choice in digital wallets and mobile payments in Australia, as well as greater consumer confidence in mobile payment technology. They also said it would unleash more innovation and investment in digital wallets and other mobile applications.

"While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits would be outweighed by detriments," Mr. Sims said.

In the final ruling, the regulator said collective bargaining by the banks would lead to "likely distortions to and reductions in competition," including an impact on how Apple was able to compete with rival Google and the Android platform.

It also said that allowing the banks access to the NFC in iPhones for the banks could artificially influence emerging uses of the NFC controller in smartphones, potentially hampering innovation, as well as impacting on digital wallets and mobile payments that were still evolving.

"This is likely to hamper the innovations that are currently occurring around different devices and technologies for mobile payments," Mr. Sims said.

-Write to Rob Taylor at rob.taylor@wsj.com

(END) Dow Jones Newswires

March 30, 2017 19:43 ET (23:43 GMT)

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