European regulators reportedly want to block American tech giants from a new financial data-sharing system.
As the Financial Times (FT) reported Sunday (Sept. 21), the European Union aims to exclude Amazon, Apple, Google and Meta from this system, designed to allow for the development of digital consumer finance products.
This decision, the report added, would mark a victory for banks as they try to fend off competition from Big Tech, out of fear that these companies will extract the value of knowing consumer spending and saving patterns.
According to the FT, this is happening as negotiations on the Financial Data Access (FiDA) regulation are entering their closing, with diplomats telling the news outlet that Big Tech groups will almost certainly face defeat.
“This is one file where the Big Tech players are actually losing the lobbying fight,” said one EU diplomat.
The reforms aimed to empower third-party service providers to access data from banks and insurers and use them to create new services such as financial advice.
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But Europe’s financial industry has tried to limit access, contending it would risk so-called digital gatekeepers “exploiting sensitive data” possessed by European financial institutions and “strengthen any dominant position.”
In a document sent to other EU countries, and seen by the FT, Germany argued in favor of barring Big Tech groups “to promote the development of an EU digital financial ecosystem, guarantee a level playing field and protect the digital sovereignty of consumers.”
In related news, PYMNTS wrote last week about the “intense police debate” around consumer data access connected to the Consumer Financial Protection Bureau’s 1033 rule, which governs open banking.
“These debates will dominate regulatory meetings and congressional hearings in the months ahead,” that report said. “Key disagreements over data privacy, access scope, competitive fairness and the practical burdens for innovators are already shaping the course for open banking in the United States.”
Taking part in the debate are banking trade groups, who issued a statement in July arguing that without “the ability to obtain consumer data securely, aggregators’ and FinTechs’ business models would be significantly undermined.”
That statement came in response to the American FinTech Council’s letter to President Donald Trump days earlier.
“Some of the nation’s largest banks have raised legal and operational challenges to the open banking standards, including filing lawsuits to delay the rule’s implementation and introducing new fees and restrictions that could limit how consumers share their financial data,” the council said in a news release announcing the letter.
“Such measures threaten to reduce consumer choice, hinder competition, and slow the pace of innovation that benefits Americans nationwide.”