Notice2021-24176
Notice and Request for Comment Regarding the CFPB's Inquiry Into Big Tech Payment Platforms
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 5, 2021
Issuing agencies
Consumer Financial Protection Bureau
Abstract
On October 21, 2021, the Consumer Financial Protection Bureau (Bureau or CFPB) ordered six large technology companies operating payments systems in the United States to provide information about certain of their business practices. The information will help the CFPB better understand how these firms use personal payments data and manage data access to users so the Bureau can ensure adequate consumer protection. Accompanying the orders, the Director of the Bureau issued a statement which is reprinted in this document for public review and comment. The Bureau invites any interested parties, including consumers, small businesses, advocates, financial institutions, investors, and experts in privacy, technology, and national security to submit comments to inform the agency's inquiry.
Full Text
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<title>Federal Register, Volume 86 Issue 212 (Friday, November 5, 2021)</title>
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[Federal Register Volume 86, Number 212 (Friday, November 5, 2021)]
[Notices]
[Pages 61182-61183]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24176]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
[Docket No. CFPB-2021-0017]
Notice and Request for Comment Regarding the CFPB's Inquiry Into
Big Tech Payment Platforms
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Notice; request for comment.
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SUMMARY: On October 21, 2021, the Consumer Financial Protection Bureau
(Bureau or CFPB) ordered six large technology companies operating
payments systems in the United States to provide information about
certain of their business practices. The information will help the CFPB
better understand how these firms use personal payments data and manage
data access to users so the Bureau can ensure adequate consumer
protection. Accompanying the orders, the Director of the Bureau issued
a statement which is reprinted in this document for public review and
comment. The Bureau invites any interested parties, including
consumers, small businesses, advocates, financial institutions,
investors, and experts in privacy, technology, and national security to
submit comments to inform the agency's inquiry.
DATES: Comments must be received on or before December 6, 2021.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2021-
0017, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#44062d231021272c14253d29212a30370d2a35312d363d04272234266a232b32"><span class="__cf_email__" data-cfemail="f0b29997a4959398a091899d959e8483b99e8185998289b093968092de979f86">[email protected]</span></a>. Include Docket No.
CFPB-2021-0017 in the subject line of the message.
<bullet> Mail/Hand Delivery/Courier: Comment Intake--Statement into
Big Tech Payment Platforms, Bureau of Consumer Financial Protection,
1700 G Street NW, Washington, DC 20552. Please note that due to
circumstances associated with the COVID-19 pandemic, the Bureau
discourages the submission of comments by hand delivery, mail, or
courier.
Instructions: The Bureau encourages the early submission of
comments. All submissions should include document title and docket
number. Because paper mail in the Washington, DC area and at the Bureau
is subject to delay, commenters are encouraged to submit comments
electronically. In general, all comments received will be posted
without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. In addition, once the
Bureau's headquarters reopens, comments will be available for public
inspection and copying at 1700 G Street NW, Washington, DC 20552, on
official business days between the hours of 10 a.m. and 5 p.m. Eastern
Time. At that time, you can make an appointment to inspect the
documents by telephoning 202-435-7275.
All comments, including attachments and other supporting materials,
will become part of the public record and subject to public disclosure.
Proprietary information or sensitive personal information, such as
account numbers or Social Security numbers, or names of other
individuals, should not be included. Comments will not be edited to
remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Amy Zirkle, Program Manager for
Payments & Deposits, (202) 435-7505. If you require this document in an
alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#c7848197859886a4a4a2b4b4aea5aeabaeb3be87a4a1b7a5e9a0a8b1"><span class="__cf_email__" data-cfemail="cd8e8b9d8f928caeaea8bebea4afa4a1a4b9b48daeabbdafe3aaa2bb">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
The following statement was issued by the Bureau's Director, Rohit
Chopra, on October 21, 2021. This statement accompanied orders issued
to six large technology companies operating payments systems in the
United States to provide information about certain of their business
practices.\1\ The Bureau invites any interested parties to submit
comments to inform the agency's inquiry.
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\1\ An example order can be found at <a href="https://www.consumerfinance.gov/documents/10176/cfpb_section-1022_generic-order_2021-10.pdf">https://www.consumerfinance.gov/documents/10176/cfpb_section-1022_generic-order_2021-10.pdf</a>.
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II. October 21, 2021 Statement
Faster, friction-less, and cheaper payment systems offer
significant potential benefits to consumers, workers, their families,
and small businesses in the United States. For example, families can
send money to friends without delay, or to relatives overseas at lower
costs. Fast payment systems can also help small businesses succeed with
quicker transactions, lower cost, and more revenue conversion. And
faster settlement can reduce the need for families and businesses to
borrow.
But payments businesses are network businesses and can gain
tremendous scale and market power, potentially posing new risks and
undermining fair competition. Furthermore, knowing what we spend our
money on is a valuable source of data on consumer behavior. This data
can be monetized by companies that seek to profit from behavioral
targeting, particularly around advertising and e-commerce. That many
Big Tech companies aspire to grow in this space only heightens these
concerns.
In China, we can already see the long-term implications of these
forces. 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.
Today the Consumer Financial Protection Bureau (CFPB) has ordered
six technology platforms offering payment services to turn over
information about their products, plans and practices when it comes to
payments. The orders were issued to Google, Apple, Facebook, Amazon,
Square, and PayPal. The CFPB will also study the practices of the
Chinese tech giants that offer payments services, such as WeChat Pay
and Alipay.
Congress has tasked the CFPB with ensuring that markets for
consumer financial products and services are fair, transparent, and
competitive. To that end, it has authorized the CFPB to require
participants in the marketplace
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to provide information that help the Bureau monitor risks to consumers
and to publish aggregated findings that are in the public interest.
Little is known publicly about how Big Tech companies will exploit
their payments platforms. For example, will the operators engage in
invasive financial surveillance and combine the data they collect on
consumers with their geolocation and browsing data? \2\ Will they in
turn use this data to deepen behavioral advertising, engage in price
discrimination, or sell to third parties?
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\2\ In 2019, I joined global privacy regulators to seek
information about Facebook's Libra project. At the time, the company
failed to substantively respond. See <a href="https://www.priv.gc.ca/en/opc-news/speeches/2019/s-d_190805/">https://www.priv.gc.ca/en/opc-news/speeches/2019/s-d_190805/</a>.
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Will these companies operate their payment platforms in a manner
that interferes with 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?
Finally, 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? \3\
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\3\ The law currently provides for a number of safeguards in the
payments sector, including but not limited to the Electronic Fund
Transfer Act, the Gramm-Leach-Bliley Act, and the Consumer Financial
Protection Act.
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The CFPB's inquiry will help to inform regulators and policymakers
about the future of our payments system. Importantly, it will also
yield insights that may help the CFPB to implement other statutory
responsibilities, including any potential rulemaking under Section 1033
of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The
CFPB's orders build on the efforts of the Federal Trade Commission's
work to shed light on the business practices of the largest technology
companies in the world.
The CFPB's inquiry is one of many efforts within the Federal
Reserve System to plan for the future of real-time payments and to
ensure a fair and competitive payments system in our country. The
Bureau intends to open a Federal Register docket to invite public
comment. I invite any interested parties to submit comments to inform
the agency's inquiry.
Dated: November 1, 2021.
Rohit Chopra,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2021-24176 Filed 11-4-21; 8:45 am]
BILLING CODE 4810-AM-P
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