In an earlier post I noted that that several Australian banks had applied to the ACCC for authorisation to collectively bargain ‘with providers of third-party mobile wallet services [including Apple] on conditions relating to competition, best practice standards, and efficiency and transparency.’
Authorisation and interim authorisation
Authorisation may be granted for cartel conduct and other prohibited anti-competitive conduct on public benefit grounds. Applications typically take up to six months, which allows the ACCC to undertake detailed market studies and full consideration of potential competitive detriment and claimed public benefit.
It is, however, possible too obtain interim authorisation, which may be granted pursuant to s 91 of the Act, enabling parties to lawfully engage in the proposed conduct while the substantive application is considered. The banks sought interim authorisation for their proposed conduct.
The ACCC’s authorisation guidelines set out the circumstances in which it is likely to grant interim authorisation pursuant to s 91. These include (para 8.5):
- consideration of the object of the Act,
- the ‘extent to which the relevant market will change if interim authorisation is granted’,
- the ‘urgency of the need for authorisation’,
- the ‘possible harm’ to the applicant if interim authorisation is denied,
- the possible harm to others if interim authorisation is granted or denied and
- any possible ‘public benefits or detriments that the ACCC can assess at the time of considering the request for interim authorisation.’
Interim authorisation denied
In a decision that I’m sure came as no surprise to anyone, the ACCC today denied the banks’ application for interim authorisation.
In its decision denying interim authorisation the ACCC briefly noted that, after considering factors relevant to granting interim authorisation (set out in its decision) it was not appropriate to grant interim authorisation at this time. In particular, the ACCC noted that
‘the applications raise complex issues for consideration’
which require further market consultation, with the result that at this time
‘the ACCC does not have sufficient information to form a view on the likely public benefits and public detriments of the proposed conduct or the possible harm to consumers.’
The ACCC further noted that it
‘does not see compelling reasons to support the urgency of the application’ and expressed concern that ‘the proposed conduct has the potential for continuing impacts on competition, even if any arrangements reached are later unwound.’
Review of authorisation application continues
The ACCC has made clear that its decision to deny interim authorisation ‘is not indicative of whether or not a draft or final authorisation will be granted’. That review continues.
Consultation and authorisation register
Submissions from interested parties on the substantive authorisation application were due yesterday (19 August). The applicant will then be given an opportunity to respond to issues raised before the ACCC issues a draft decision in October. Further consultation will follow, with a final decision to follow within six months of the original application (expected December 2016/January 2017).
Full details of the application, decisions, correspondence and submissions by interested parties (to date seven have been received, including from Apple), can be found on the ACCC’s authorisation register.
There’s plenty of interest in this so more media is expected – I’ll add links as the come:
- Supratim Adhikari, ‘Banks’ digital wallet move delayed’ (The Australian, 19 August 2016)
- Rohan Pearce, ‘ACCC won’t take action in bank’ Apple Pay fight – yet’ (Computerworld, 19 August 2016)
- Clancy Yeates, ‘Big four banks vs Apple: ACCC defers decision’ (SMH, 19 August 2016)
- Campbell Simpson, ‘ACCC Won’t Grant Aussie Banks’ Collective Bargaining For Apple Pay Straight Away’ (Gizmodo, 19 August 2016)