UK financial regulator launches investigation into Big Tech’s market influence
A financial regulator in the United Kingdom has begun investigating Big Tech’s growing investments in credit cards and banking.
The Financial Conduct Authority launched an inquiry on Tuesday into decisions by Apple, Amazon, Google, and Meta to offer financial services, such as processing payments, taking deposits, issuing credit, and offering insurance. The regulator was worried about the companies achieving dominance in the country’s financial markets.
“We want to make sure that these benefits are fully realized while, at the same time, ensuring good consumer and market outcomes,” said Sheldon Mill, executive director of consumers and competition at the FCA, in a press statement. “This is vital when we consider the role of Big Tech firms in the provision of key technological infrastructure like cloud services.”
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The inquiry will allow the Big Tech companies, their partners, and competitors to voice their views to determine if there are any actual competition risks inherent in their efforts to expand into product lines such as credit, as Apple has done.
“We do think it’s important given the scale, given the large capital reserves that some of those firms could have to support entry, that we’re starting to understand how competition might develop in our markets,” Mills told the Financial Times.
The FCA also pushed a market analysis arguing that Big Tech’s entry into the financial market could inspire U.K. financial entities to innovate in the short term but could create risks in the long term.
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“Based on evidence in Big Tech firms’ core markets and their expanding ecosystems, there are competition risks arising from them rapidly gaining market share, markets’ tipping’ in their favor and potential exploitation of market power,” the analysis argued. The analysis is not intended to inspire.
The FCA has not proposed any changes to U.K. regulations as of Tuesday.
