Apple financial services – like Apple Card and the new savings account – are mostly restricted to the US at present, but the UK regulator is already launching an investigation into the potential antitrust concerns.
When I reflected in 2015 about the possibility of Apple becoming a bank, even I wondered if I was crazy to consider the scenario. Since then, however, Apple has made a number of notable moves in this direction.
Although the company partners with an existing bank for most of these services, Apple acts as its own bank for Apple Pay Later. This last move prompted the US consumer credit regulator to express antitrust concerns.
The Consumer Financial Protection Bureau (CFPB) said Apple Pay Later raises “a host of issues,” including antitrust and privacy issues.
Among the questions the agency would consider was “whether it can actually reduce competition and innovation in the marketplace,” CFPB director Rohit Chopra said in an interview.
In response to a question about Apple’s launch, Chopra said Big Tech’s move into short-term lending “raises a host of issues,” including how companies would use customer data. “Is it combined with browsing history, geolocation history, health data, other apps?”
Earlier this year, Apple acquired Credit Kudos, a British start-up taking a new approach to assessing the creditworthiness of applicants for funding. This seemed a clear indicator of plans to launch the Apple Card in the UK.
Investigation into Apple’s financial services in the UK
The FinancialTimes reports that the UK’s financial services regulator is asking questions similar to those being asked in the US.
The Financial Conduct Authority (FCA) is launching an investigation this week into strikes by Apple, Amazon, Google and Facebook parent Meta at retail money companies. He asks Big Tech companies, their mates and potential rivals for his perspective on expanding Silicon Valley to funds, deposits, credit score and insurance coverage.
As is often the case with early-stage antitrust investigations, the concern is that consumers may benefit in the short term but be harmed in the long term.
While acknowledging that customers could take advantage of this in a short period of time, the FCA means that Big Tech companies may have the ability to “leverage their ecosystems” and huge information stores to “lock in consumers,” as in other markets where they already face regulation. scrutiny, resembling cellular app stores.
Tech giants can win business initially with offers that appeal to consumers, including those who may struggle to get credit elsewhere. They can also incentivize UK financial firms to improve their own offerings in order to stay competitive. But there is a longer-term risk, the FCA suggests.
“Based on evidence from Big Tech companies’ core markets and their expanding ecosystems, there are competitive risks arising from their rapid market share gains, markets ’tilting’ in their favor, and potential exploitation market power,” the FCA wrote in its 61-page assessment. “This could be detrimental to competition and consumer bottom lines.”
While antitrust is often misinterpreted as addressing monopolies, it’s actually the opposite.
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