As the likes of Google and Apple have diversified their offering to include payments and other financial services, the U.K.’s Financial Conduct Authority (FCA) is looking to understand the consequences of this trend for competition.
“The potential competition impacts of Big Tech entry and expansion in retail financial services,” a discussion paper the regulator published Tuesday (Oct. 25), explores the impact of Big Tech firms’ arrival in payments, deposit taking, consumer credit and insurance markets.
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The paper lists Google, Apple, Meta Platforms, Amazon, and Microsoft as global Big Tech Firms. It adds Alibaba, Tencent and Mercado Libre as regional ones.
The regulator observes that in the U.K., the global Big Tech firms listed have some FCA permissions to offer retail financial services. Google, Amazon, Meta, and Apple have some payment permissions, and Google and Meta also have some e‑money permissions. Apple and Amazon have some consumer credit and insurance permissions.
The initial paper will be followed by an expert panel discussion in November and sector-specific workshops in December. The FCA has also requested comments from interested parties, who have until Jan. 15 to respond.
“In recent years, Big Tech’s entry into financial services, in the UK and elsewhere, has demonstrated their potential to disrupt established markets, drive innovation and reduce costs for consumers,” FCA Executive Director of Consumers and Competition Sheldon Mills said in a press release. “Across the world, we’ve seen the capability of Big Tech to offer transformative new products in areas such as payments, deposits and consumer credit … The discussion we are starting today will inform the FCA’s pro-competitive approach to digital markets, and I encourage consumers, firms and fellow regulators to join the conversation.”
Hinting at potential antitrust concerns, the release states that “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.” For each of the financial services it discusses, the paper lists potential competition benefits and harms presented by Big Tech.
At present, no regulatory changes are being proposed and the FCA’s paper aims only to stimulate discussion on the topic.
Should the FCA ever deem that Big Tech moves in the financial services space are uncompetitive, it would likely work with the Competitions and Markets Authority (CMA) in any resulting investigation.
The discussion paper references multiple CMA Big Tech probes including the case of Meta’s Giphy acquisition. As PYMNTS reported recently, Meta is set to sell Giphy following an order from the CMA.
