The Financial Conduct Authority (FCA) will investigate Apple Financial Services over antitrust issues.
According to 9to5Mac, the UK’s Financial Conduct Authority (FCA) is launching an inquiry into Apple’s financial services, such as the Apple Card and the new savings account, in what appears to be an early-stage antitrust investigation.
Likewise, the agency is also planning to find ways to regulate other big tech firms like Google, Amazon, and Facebook’s parent company Meta.
According to The Guardian, the FCA is concerned that the presence of these big techs could potentially harm competition in the country’s financial services sector.
The FCA has raised concerns over Apple and other big tech firms.
In the field of mobile wallets, Apple became one of the biggest players when it launched credit cards and later, Buy Now and Pay Later. Recently, the company also launched a savings account.
For most of these services, the company has partnered with an existing bank. However, Apple Pay later said, “The company is acting as its own bank.”
According to the US Consumer Financial Protection Bureau (CFPB), later use of Apple Pay raised a number of issues, such as mistrust and privacy concerns.
The company earned Credit Kudos earlier this year. This is a start-up company in the UK that uses a new method to assess the “creditworthiness of applicants for finance”.
Apple’s move appears to be a clear move to finally bring the Apple Card to the country. It caught the attention of the FCA and now the agency has expressed its concern about how the company could potentially affect UK financial services.
One of the FCA’s concerns is the potential disruption that Apple and other big tech firms could cause to the country’s financial markets.
The agency acknowledged that the Cupertino-based company and other big tech firms could bring innovation to the country’s financial services.
However, the FCA also expressed concern that they could dominate the market, leading to “potential abuse of market power”.
The FCA fears that big tech firms could transform UK financial services.
iPhone maker Apple, Google owner Alphabet, giant retailer Amazon, and Facebook owner Meta already offer some financial services in the UK, according to the agency.
Over time, however, major tech firms have slowly been rolling out more products around the world, including Apple’s credit card and, most recently, a planned “pay now later” feature.
The entry of big tech firms into the financial services sector could potentially benefit many consumers, according to the agency’s analysis.
However, according to The Guardian, the FCA said that if these firms could exploit strong market power to undermine healthy competition and worsen consumer outcomes, the “benefits could be lost”. are.”
“In recent years, the entry of big tech into financial services, in the UK and elsewhere, has demonstrated its ability to disrupt established markets, innovate and reduce costs for consumers,” Consumers and Competition Executive Director Sheldon Mills said.
Additionally, he added, the world has seen the potential of big tech firms to bring transformative new products, including payments, deposits, and consumer loans.
The FCA fears that big tech firms could end up acting as “gatekeepers” of financial services.