CFPB Orders Big Tech to Provide Their Payment System Plans
The Consumer Financial Protection Bureau (CFPB) has demanded information about payment system plans from companies like Amazon, Apple, Facebook, Google, PayPal, and Square. The agency wants to understand these companies’ data harvesting practices while also learning how they monetize payment data.
“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” CFPB Director Rohit Chopra said in a release. “We have ordered them to produce information about their business plans and practices.”
“The CFPB has the statutory authority to order participants in the payments market to turn over information to help the Bureau monitor for risks to consumers and to publish aggregated findings that are in the public interest,” the agency said in its statement.
“The CFPB’s work is one of many efforts within the Federal Reserve System to make payments safer, faster, and more competitive.”
The CFPB will also investigate payments services like WeChat and Alipay
The bureau will also seek information on whether these corporations use the data to target certain consumer behaviors. Moreover, it will look into how the companies uphold laws such as the Electronic Fund Transfer Act and the Gramm-Leach-Bliley Act.
Furthermore, the CFPB will look into payments systems provided by Chinese companies. The CFPB Director cited the example of services like WeChat Pay and Alipay effectively running a monopoly in China.
It’s worth pointing out that the bureau’s order doesn’t guarantee regulatory changes. However, it does signal a growing call for more oversight on Big Tech, particularly Facebook. Engadget points out that the Biden administration is keen on curbing the violations of tech giants.
This new order by the CFPB also continues Facebook’s long tussle with the regulators. In August, the Federal Trade Commission (FTC) filed an amended lawsuit against Facebook over allegations of violating antitrust laws. This came after a previous lawsuit was thrown out in June, eventually leading the FTC to file a modified lawsuit.
More recently, Facebook began testing its digital currency wallet called Novi as part of a pilot program. The service is currently under testing in the U.S. and Guatemala. It allows users to send and receive money without the hassle of fees.
Novi originally made its debut as Calibra in 2019 until Facebook changed its name in May 2020. The company also has plans for its own cryptocurrency known as Diem. However, it won’t debut with Novi due to regulatory hurdles.
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