But the preliminary decision was “finely balanced” and could be reversed if the banks make a convincing case before a final opinion is due in March, Australian Competition and Consumer Commission Chairman Rod Sims told Reuters.

Losing the case would be a setback to the banks’ hopes of bypassing Apple’s in-house payments system and rolling out their own iPhone versions free of competition from the Silicon Valley giant, which has the biggest smartphone market share in Australia.

Under Australian law, bargaining cartels can be formed as long as they have permission from authorities, and the banks are seeking the ability to offer their own digital wallets in Apple iPhones – the first major challenge to Apple Pay of its kind.

Commonwealth Bank of Australia (CMWAY), Westpac Banking (WEBNF), National Australia Bank (NASXF), and smaller rival Bendigo and Adelaide Bank (BXRBF) also want to bargain with Apple over charging customers extra fees for transactions made through Apple Pay.

A successful application would allow the banks – which jointly have two-thirds of the Australian credit card market – to collectively boycott Apple Pay for up to three years as a negotiating tactic.

Apple has argued that third parties should not have access to its digital wallet technology because it would undermine customers’ privacy and data security. The company’s representatives did not immediately respond to requests for comment on Tuesday.

Apple Pay allows users to register credit cards on devices such as iPhones, and pay for goods and services by swiping the devices over contactless payment terminals. Apple charges card providers for transactions via the service, which it introduced to Australia last year.

In their application, the banks argue that there is an information imbalance weighted in Apple’s favour due to the secret nature of the terms Apple has agreed with competitors over the use of Apple Pay, including fees.

Sims said that if the ACCC determines that the heart of the banks’ complaint lies with fees, then it would be difficult for them to win the case. But if it is more about access to Apple’s contactless payment technology, then they had a stronger case.

A representative for the banks behind the application, Lance Blockley, said there would be effectively no competition against Apple for mobile payments on the iPhone if the draft determination stood. The banks would continue to argue their case with the ACCC, he said.

Australia and New Zealand Banking Group (ANZBY) is the only one of Australia‘s “Big Four” banks to have a digital wallet agreement with Apple, betting that being one of the first to offer the service would help bring in more customers.