The Consumer Financial Protection Bureau demanded that Apple Inc., Amazon Inc., Facebook Inc., Google and other tech firms turn over information about how they collect, use and sell consumers’ financial data.
The consumer watchdog agency on Thursday sent letters to the tech giants demanding the information, opening the door to potential rulemaking or enforcement actions. All of the tech companies contacted by the CFPB engage in consumer financial services.
“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 statement.
PayPal Holdings Inc. and Square Inc. are also subject to the information request, which was first reported Wednesday by Bloomberg Law.
The six companies that received the letters didn’t respond to a request for comment.
The bureau wants to know how companies like Apple and Google integrate Apple Pay and Google Pay into their operating systems. It also wants to know more about the practices at peer-to-peer payments platforms like PayPal’s Venmo app and Square’s CashApp.
Chopra said one of his main concerns is that users will lose the ability to choose which payments apps they use as a result of companies’ business practices.
Chopra cited the experience in China, where AliPay and WeChat have established dominant payments networks and denied access to companies that might provide better or cheaper services. Both companies are prohibited from operating in the U.S.
“Alipay and WeChat Pay are deeply imbedded into the lives of the Chinese public, combining messaging, e-commerce and payment functionality into super-apps. In such a market, consumers have little choice but to use these apps and little market power to shape how their data is used,” he said.
The CFPB also wants to know how U.S. tech giants share payments data among their subsidiaries and with outside data brokers and other third parties. The 55-page information demand includes a series of questions about how much money the companies earn from selling consumer data.
The CFPB is interested in any restrictions tech companies put on accessing their services, as well as any special benefits that they provide to consumers who choose to use them.
The Electronic Transactions Association, a trade group representing digital payments firms, said in a statement that its members “devote enormous resources to keeping digital transactions secure.”
“The digital transactions industry has a good story to tell about its efforts to protect consumer data. We look forward to working with Director Chopra and the CFPB on this important effort,” Jodie Kelley, the ETA’s CEO, said in the statement.
Apple, Amazon, Google, PayPal and Square are all ETA members.
The CFPB said answers are due from tech companies by Dec. 15.
The CFPB will use the information to guide potential regulations allowing consumers to more easily transfer their financial data between companies. The data gathered by the CFPB will also help develop the Fed’s real-time payments platform, the agency said.