The Consumer Financial Protection Bureau (CFPB) is seeking information on the business practices of large technology companies operating payments systems.
As online commerce and electronic payments have become more prevalent, they present new risks to consumers and the marketplace. The information will help the CFPB better understand how these companies use personal payments data and manage data access to users.
“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” CFPB Director Rohit Chopra said. “We have ordered them to produce information about their business plans and practices.”
The initial orders were sent to Amazon, Apple, Facebook, Google, PayPal, and Square. Further, the CFPB will be studying the payment system practices of Chinese tech giants, including Alipay and WeChat Pay.
Specifically, the orders will compel information on data harvesting and monetization. Payment companies may be sharing payment data across product lines and with third parties or using it for behavioral targeting. They also seek information on access restrictions and user choice. When payment systems gain scale, merchants and other partners feel obligated to participate. That increases the risk that payment systems operators will limit consumer choice and stifle innovation by anticompetitively excluding certain businesses.
The orders also seek information on consumer protections. Consumers expect certain assurances when dealing with companies that move their money, like protection from fraud, data privacy, customer service, and notification of payments made in error. The orders seek to understand the robustness with which these companies prioritize consumer protection.