CFPB Goes After Tech Companies’ Payment Practices
The White House’s Next Objective in Its Push to Regulate Big Tech
The Consumer Financial Protection Bureau launched an investigation into how big tech companies including Amazon (AMZN), Apple (AAPL), Google (GOOGL), and Facebook (FB) collect and use consumers’ financial data. It marks a next step in regulators’ increased scrutiny of the country’s biggest tech companies.
The CFPB sent orders to the tech companies seeking information on how they use personal payment information and manage access to customers’ data. The companies all provide financial services to consumers and have aspirations to offer even more. “Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” CFPB Director Rohit Chopra said when announcing the actions. “We have ordered them to produce information about their business plans and practices.”
CFPB Seeks Broad Information
The CFPB’s inquiry is broad, with questions covering everything from how tech companies use the data they gather to how they monetize that data. The CFPB wants the companies to answer a slew of questions and also plans to seek comments from the public.
The CFPB is also seeking information from Square (SQ) and PayPal (PYPL), two digital payment processors. The CFPB said its inquiry is part of the Federal Reserve’s efforts to make digital payments “safer, faster, and more competitive.”
Is More Regulation Coming for Big Tech?
The CFPB’s initiative is the latest move by the government to increase scrutiny of big tech. The Biden administration is stacked with officials who support more antitrust enforcement, particularly of tech companies. At the same time, both Republican and Democrat lawmakers have called for the tech sector to face more stringent regulation and oversight in their privacy and competitive practices.
The Biden administration has taken a tougher stance in policing the tech sector in a number of ways. The CFPB’s action is the latest initiative. Investors will be paying close attention to see how these investigations, hearings, and proposed regulations will impact Big Tech.
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