Apple wins court battle against banks in Australia over control of Apple Pay technology

An Australian consumer watchdog has barred four banks from collectively bargaining with Apple for gaining access to the contactless payment technology used in iPhones. Four banks — Commonwealth Bank, Westpac, National Australia Bank and Bendigo and Adelaide Bank — wanted to negotiate with Apple to gain access to its payments technology used in “Apple Pay” for their own apps, avoiding having to pay fees to Apple, the BBC reported on Friday.

The banks do not allow their cards to be used with “Apple Pay” because they never reached agreement on the conditions. By collectively bargaining with the Cupertino-headquartered tech giant, these four banks wanted to convey to Apple that unless it gave them access to its iPhone technology, they would continue to prevent their customers from using Apple Pay.

In its final ruling on Friday, the Australian Competition and Consumer Commission (ACCC) said that the collective threat to boycott Apple was “likely to reduce or distort competition”. The commission said that ruling in favour of the banks would have reduced competition by forcing Apple to act more like Google, whose more open Android operating system allows contactless payments from individual apps.

“It is a tricky issue for a competition regulator to force one competitor to adopt a strategy of the other competitor,” ACCC chairman Rod Sims was quoted as saying. Meanwhile, the banks have said that they were “disappointed” by the decision and would review their future strategies. The near field communication (NFC) system used in “Apple Pay” allows users to transact by just holding their phone to a small terminal, with the money deducted from a bank card registered with Apple Pay.

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