The move into financial services by Google, Amazon, Apple
and other large technology companies warrants a close look by regulators.
That's according to Federal Trade Commission chair Lina Khan, who expressed concerns about tech companies' financial
offerings this week to the Consumer Financial Protection Bureau.
“The potential risks created by Big Tech’s expansion into payments and financial services are notable and demand
close scrutiny,” Khan writes.
Her comments came in response to the Consumer Financial Protection Bureau's request for input into an investigation of how tech companies handle data about
consumers' purchases.
In October, that agency ordered
Google, Apple, Facebook, Amazon, Square, and PayPal to provide detailed information about their policies -- including how they draw on consumers' information.
Last month, the Consumer
Financial Protection Bureau solicited public comments related to tech companies' online payment platforms.
Khan said in her comments that tech companies' expansion into financial services
“could enable them to entrench and extend their market positions and privileged access to data and AI techniques in potentially anticompetitive and exploitative ways.”
Khan added
that online payment platforms could enable tech companies to amass “hyper-granular” information about consumers.
“For example,” she wrote, “they can map
individual spending information against geolocation, social connections, browsing history, and a host of other sensitive variables.”
She went on to write that “checking-account
like products” could also provide the kind of data that could increase tech companies' “ability to target and profile consumers.”
Some privacy advocates are raising similar
concerns.
“One of the fundamental data building blocks for surveillance marketing is the availability of access to crucial financial information on consumers,” the Center for
Digital Democracy and U.S. Public Interest Research Group said this week in written comments.
The groups argue that large tech companies can
already develop “robust online dossiers” about consumers, thanks to partnerships with data brokers, financial information companies and others.
But the advocates add that tech
companies will be able to glean yet more information by offering their own payment systems.
“As the platforms and other leading providers of digital payments further expand their market
share, they will -- unless the Bureau acts -- have greater capability to leverage their abundance of consumer financial data, geolocation information, and other profiling sources to engage in
financial services operations,” the organizations write.