The Federal Trade Commission (FTC) has chimed in on the Consumer Financial Protection Bureau’s (CFPB) inquiry into big tech and payments.
In a letter dated December 21, 2021, Lina Khan, Chair of the FTC said that big tech providing financial services “demand close scrutiny.”
In October of 2021, the CFPB demanded that tech firms like Amazon, Apple, Google, Facebook and more turn over information regarding their payments services. At that time, CFPB Director Rohit Chopra said that “Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” adding they have ordered them to forward their business plans and practices.
The CFPB noted that as tch firms have integrated payments into their platform they have also introduced “new risks to consumers and to a fair, transparent, and competitive marketplace.”
In her letter, Khan said that big tech participating in payments and financial services could potentially become “anticompetitive and exploitative.” She also said there is a risk of discrimination and bias while concentrating payments in a single point of failure. What Khan did not say is consumers and businesses have benefited from these new services due to convenience and enhanced features that have fueled the growth of digital payments.
Selected by President Joe Biden to lead the FTC, Khan is well known for here anti-tech opinion. During her confirmation hearing for the FTC post, Khan garnered key support from some Republicans thus ensuring her nomination was approved. Interestingly, both sides of the aisle hold concerns about certain activities by big tech firms with some advocating for the break up of some firms. Of course, overly aggressive actions taken against US-based big tech firms may undermine their global competitiveness in sectors where the US currently dominates, creating jobs and boosting prosperity.
