If you have ever watched a movie where someone goes to jail, the advice that the person usually receives is to fight the biggest inmate on the first day, to show you mean business and that you’re tough. Well, the new Director of the Consumer Financial Protection Bureau, who has been in office for all of a week, announced yesterday that his agency has ordered Apple, Amazon, Facebook, Google, and a handful of other tech giants to share how they collect payments from their customers, what they do with that data, and the consumer protections they have in place.
Big enough for you?
The announcement was seen as a “clear signal” that the CFPB is going to return to its “aggressive posture” of its tenure under former Director Richard Cordray, according to a published report.
“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” said Chopra, in a statement. “We have ordered them to produce information about their business plans and practices.”
Chopra laid out a number of possible scenarios under which the companies being investigated may “exploit” their payment platforms. The questions provide insight into the types of situations that the CFPB is going to care about moving forward, and may help companies in the accounts receivable management industry understand where their actions might come under scrutiny from the agency.
- Will the operators engage in invasive financial surveillance and combine the data they collect on consumers with their geolocation and browsing data?
- Will they in turn use this data to deepen behavioral advertising, engage in price discrimination, or sell to third parties?
- Will these companies operate their payment platforms in a manner that interferes with the fair, transparent, and competitive markets?
- Will the payment platforms be truly neutral, or will they use their scale to extract rents from market participants?
- Will small businesses feel coerced into participating in the payment platform out of fear of being suppressed or hidden in search or product listings?
- If these tech companies enter a market that competes with other providers on the platform, will these providers be removed or otherwise disadvantaged?
- What factors will these tech companies use when disqualifying or delisting an individual or business from participating on the platform?
- How will these payment platforms ensure that key consumer protections are adhered to?
- How effectively do they manage complaints, disputes and errors?
- Are they sufficiently staffed to ensure adequate steps are taken to address consumer protection and provide responsive customer service when things go wrong?