Parliamentary committee urges ACCC to examine ‘deeply uncompetitive’ Apple on payments
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The news: The House Standing Committee on Economics has called Apple ‘deeply uncompetitive’ as it opens the door for Australia’s banks to collectively bargain with the big tech company.
Publishing its final report in its payments inquiry on Monday, the Committee was highly critical of how a variety of card and tech companies were using their market dominance, but reserved its sharpest criticism for Apple.
“The committee notes that Apple’s current options to permit third-party developers access to near field communication still reflects deeply anti-competitive behaviour and that the actions taken by Apple to contractually limit the ability of the banks to reveal commercial and contractual terms, even including to regulators, is of serious concern,” it wrote.
“The committee considers that this behaviour acts as a competitive handbrake, exclusively benefiting Apple as a corporation possessing significant market power.”
It echoes the concerns raised by the big banks which have complained they are at a severe disadvantage being locked out of Apple Pay’s NFC technology, as digital wallet’s share of card payments grows to 43% — as part of a long running feud.
The committee directed the ACCC to review and suggest options to curtail Apple’s market power, and asked the federal government to consider forcing Apple top open up its NFC technology.
During the public hearings, the banks also lamented their inability to collectively negotiate or discuss the fees due to Apple for facilitating each payment (said to be 15 basis points) — a situation the Economics Committee suggests may be untenable.
“The committee encourages Australian banks and payment service providers to consider lodging a new application with the Australian Competition and Consumer Commission (ACCC) to pursue collective bargaining with Apple and/or a collective boycott of Apple Pay. The committee notes that such engagement would be worthwhile where granting an exemption to banks would deliver tangible benefits to Australian consumers.”
The report made 16 recommendations including directing the ACCC to commence an inquiry into the card payments market, encouraging the RBA to streamline scheme fees, and asking Treasury to re-establish a timeline for transitioning to the New Payments Platform “as soon as practicable”.
It also instructed Treasury to establish a framework for the adoption of stablecoins as an alternate payments rail “as a matter of urgency”. It also encouraged the federal government to come up with a national approach for inject competition into the fintech industry, prepare for the coming of agentic commerce, and force international money transfer service provider to publish mid market rates.
The context: The report focuses scrutiny on the payments sector amid a broader Reserve Bank systems review.
That review initially dealt with surcharging, interchange and other merchant costs and is now examining mobile payments, buy now, pay later platforms and American Express.
The source: Parliamentary Report
