Apple and other tech giants – Amazon, Alphabet (Google) and Meta (Facebook) – have attracted antitrust concerns with their latest moves into financial services. The US Consumer Financial Protection Bureau (CFPB) is looking into Apple’s actions, its UK counterpart, the Financial Conduct Authority (FCA) is taking a broader view.
Some of Apple’s financial services like Apple Card are actually operated by existing banks like Goldman Sachs. However, Apple is acting as its own bank for the new “Pay Later” feature and that is what drew the attention of the CFPB.
Apple Card is available only in the US right now, but there are signs that it may launch in the UK as well. For example, Apple recently acquired Credit Kudos, a UK startup that makes credit assessment checks.
Other tech giants are rolling out new financial services too. For example, last week Amazon launched an online insurance store in the UK. FCA’s concern is that short-term benefits to consumers can be leveraged by the companies to squash competition in the market in the long term.
Here is what the FCA said in a post from earlier today:
“By combining financial services with their existing business, Big Tech firms can bring benefits to consumers. These might be innovative new offers with highly competitive pricing driven by increased efficiency, delivering healthy competition with incumbent financial services providers.
But in the longer term, Big Tech firms could pose competition risks if they rapidly gain market share, and they are able to exploit market power.”
The FCA isn’t taking any actions right now, it just wants to open a discussion with tech companies, consumers and even other regulators and talk about a “pro-competitive approach to digital markets”.