Apple Accused Of Leaning On Market Power

CREDIT: Gerv Tacadena/yourmortgage.com.au

The Commonwealth Bank of Australia (CBA) is still fighting for access to Apple's NFC antenna, CEO Matt Comyn choosing to highlight Apple's anti-competitive and self-preferencing behaviour.

Comyn has said, "While Apple may hold around 54% of the mobile phone market share in Australia, the Cupertino giant boasts around 80% market share when it comes to digital wallets in use."

"The fact that a single provider could have 80% market share in an individual market is usually cause for concern, and this a company - I'd be the first to say they make fantastic products - but this is a company whose market cap is double Australia's gross domestic product, and certainly in the context of tax receipts, makes very little contribution to Australia government receipts.

"I think the rise of both the power, market power, and how that market power is exerted not just in Australia...the ACCC has been prepared to take a courageous stance in some areas around digital platforms, but I think it is and should be of growing interest to Australia's Parliament."

Commonwealth introduced Apple Pay in 2019. They signed up Westpac, the National Bank of Australia (NBA), Bendigo and Adelaide Bank, and itself lost request to the ACCC to bargain against Apple. 

Comyn continued, "It's well known that Apple charges a fee...we're not able to disclose that, but I think under a reasonable regulatory information request we can. Google does not charge for such a service."

"One of the features of dealing with Apple is very, very strict documentation and non-disclosure agreements, I am restricted from answering your question."

"It is very challenging, at the extreme. I don't think it's a feature that's reflected just in financial institutions. I suspect telcos globally may have had a similar experience around distribution of their phones...they have tremendous market power and they use it."

"To be fair to them, there is a negotiation on commercial terms, but it is, effectively, you sign up to very onerous obligations to even have a conversation and a negotiation."

"There are definitely examples where we've seen self-preferencing, and you've seen that play out in multiple cases around the app store, particularly payments; you see that in terms of the payment services for app providers; we see it with access to the NFC chip; we've seen it with access to the ultrawide band, which is an improvement on Bluetooth...Apple doesn't provide access to that capability in their phones because they want to be able to deliver their own product, the smart tag product, uniquely."

"They did the same thing with the previous headset jack - it's usually dressed up around security concerns but generally you could have confidence to say it has been self-preferencing over a reasonable period of time."

"There may be lessons that can be drawn from the Media Bargaining Code in this context."

"Whether you can apply the same type of code from the News Media Bargaining Code to this context, certainly the potential is there, and it is a similar issue in the sense that the bargaining power and to access the market you're forced to negotiate with someone who's got a very large market share, you don't really have an option but for that, so in that sense there are similarities," said ACCC executive general manager of exemptions and digital Tom Leuner.

Marcus Bezzi, ACCC executive general manager, specialist advice and services said, "Whether and when to regulate a new technology, a new entrant, into a complex market is not something you do without care because the last thing you want to do is entrench the power of existing incumbents."

'NAB has announced it now offers HICAPS practitioners the ability to accept digital health insurance membership cards via the Apple Wallet.'

With this move, customers can make a health insurance claim just by holding their iPhone or Apple Watch near any HICAPS terminal across Australia. They can also pay for gap payments using Apple Pay if they are members of Medibank, Bupa. Nib, and GU Health.