The FCA has announced its intentions to hold discussions on the entry of Big Tech companies into retail financial services. 

Apple, Google, and Amazon’s forays into this sector have prompted curiosity and concern for competition in the UK marketplace. 

These discussions aim to assess Big Tech’s “potential to disrupt established markets, drive innovation and reduce costs for consumers,” said Sheldon Mills, Executive Director of Consumers and Competition. 

What are the FCA’s primary concerns?

As an introduction, the FCA published its analysis focusing on the potential impacts of Big Tech’s foray into the financial markets via four key sectors: payments, deposit taking, consumer credit, and insurance. 

While the FCA recognised the benefits of Big Tech, such as competitive prices and increased efficiency, they also warn of their potential for market domination. 

Big Tech’s ‘potential exploitation of market power’ was a key concern raised by the FCA, as well as their ability to regulate search results and advertisements.

These anti-competitive strategies have already faced scrutiny in the UK. 

Google was placed under investigation earlier this year for forcing apps that use its platform to use the company’s own payment system for in-app purchases. 

Apple was under similar review for potential infringement of competition law for its conditions of access to its App Store for developers. 

The CMA also concluded that Apple and Google have a ‘stranglehold’ over the mobile ecosystem, including app stores, web browsers, and operating systems. 

How has this been addressed elsewhere?

This has been partially addressed in the US as they have introduced several antitrust bills aimed at the major tech conglomerates.

None of these have yet to pass either legislative branch, but the Federal Trade Commission is already monitoring competition in the tech-sector via their Technology Enforcement Division established in 2019. 

Closer to home, the European Commission passed the Digital Markets Act, targeting ‘gatekeeper’ platforms with anti-competitive behaviour – with full implementation coming in May, 2023.

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Australia, South Korea, and Japan are all taking initiative to ensure fair market competition remains while Big Tech companies continue to branch into new sectors. 

As Big Tech companies continue to expand into different markets, the call for discussion is well timed to address similar concerns over monopolisation in the UK.

Mills added: “We want to make sure that these benefits are fully realised,while, at the same time, ensuring good consumer and market outcomes.”

The FCA is taking input from stakeholders until the 15th of January 2023. They are also holding a webinar to spark discussions on the topic on the 28th of November. 

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