Tech

Tech giants probed in US over use of people’s financial data

America’s Consumer Financial Protection Bureau (CFPB) said on Thursday it is probing some of the biggest names in the electronic payments industry, requesting detailed information from them on how they collect and use people’s spending data.

A strings of demands was issued by the government watchdog to Amazon, Apple, Facebook, Google, PayPal, and Square, said CFPB Director Rohit Chopra, and more could be sent to others. In addition, the agency is also looking into Chinese payment providers WeChat Pay and Alipay, saying the duo are “combining messaging, e-commerce and payment functionality into super-apps,” which America’s internet goliaths may try to imitate.

“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” said Chopra in a statement [PDF]. “We have ordered them to produce information about their business plans and practices.”

Chopra, who in his previous role as a commissioner at the FTC was highly critical of the lack of competition in the tech sector, was only sworn as bureau boss in earlier this month, and has hit the ground running. This requested data will be vital in designing competition rules to govern the next decade of payments regulation, he added.

And he wants a lot of it. Chopra said he wanted the agency to make sure America’s consumer protections are being applied to payment system data; to find out how companies were using all this spending and personal info to inform their business plans; to whom they are selling the information; and to make sure folks and businesses have a genuine choice of payment provider. The issued orders [PDF] have a very wide remit.

Reining in some of the more monopolistic excesses of the US tech sector might well be something that’s popular with both Republicans and Democrats. The Biden administration has actively recruited a host of antitrust-keen officials, including Chopra’s former aide Lina Khan, who’s now head of the FTC, an appointment Amazon and Facebook publicly opposed.

The Electronic Transactions Association (ETA), a lobbying group whose directors include staff at Apple and Google, said it will “look forward to working with Director Chopra” in the agency’s investigations.

“One of the hallmarks of the digital transactions industry is protection of consumer data,” commented ETA CEO Jodie Kelley in a statement.

“From encryption to tokenization, we devote enormous resources to keeping digital transactions secure. The digital transactions industry has a good story to tell about its efforts to protect consumer data.” ®


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