The Consumer Financial Protection Bureau’s (CFPB) inquiry into the business practices of six large technology firms operating payments systems in the United States will be open for public comment until Dec. 6, according to a Federal Register notice published Friday.
The CFPB said it is seeking to better understand how these firms use personal payments data and manage data access to users so the bureau can ensure adequate consumer protection. “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,” it said.
The CFPB on Oct. 21 announced it had ordered the six tech firms – Google, Apple, Facebook, Amazon, Square, and PayPal – to provide information about their payments-related products, plans and practices in the period from Jan. 1, 2019, through Sept. 30, 2021. The bureau said it will also study the practices of the Chinese tech giants that offer payments services, such as WeChat Pay and Alipay.
CFPB Director Rohit Chopra, in a statement Oct. 21, said this inquiry will help inform regulators and policymakers about the future of the 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,” he said. Section 1033 addresses consumer access to financial records.
Dec. 15 is the deadline for the six tech firms to respond to the orders, according to an “example” of the order the agency provided with its Oct. 21 announcement.
According to that document, the firms are being asked to respond to 55 questions across the following topics:
- Products: Specific payment products offered, including features of the payment products, ways in which payment products are marketed to consumers and businesses, fees that may be charged to consumers and businesses, and plans for evolving the product over time.
- Data harvesting: Data the company collects and retains as a result of consumers’ use of each product. The order also states that the bureau further seeks to understand the kinds of data that the company generates from this product use data – for example, through combining it with externally-sourced data or with other data obtained from the company’s own operations or with data from both such sources. More generally, it states, the bureau seeks to understand the purposes associated with the harvesting of different data fields.
- Data use and monetization: How the company monetizes the product data described in the data harvesting section – including by improving service delivery to customers of each product, by selling the data directly, and by selling advertising or other targeted content based on attributes derived from the data.
- Access restrictions: The policies the company uses to manage access to products for consumers and commercial entities. The order also states that the bureau further seeks to understand whether – and, if so, how – the firm encourages or requires users of other company products or services to use each product; how it manages third-party involvement in product delivery; and the steps the company takes to increase consumer use of its product relative to other payment products by restricting consumer access to such alternative payments products.
- Select consumer protections: How the company addresses a number of aspects of consumer protection, including disclosures and other protections with respect to data practices about each, the detection of fraudulent activities in connection with each, methods for consumer users to address issues and problems concerning products, and any accompanying obligations under federal consumer financial law and applicable bureau rules and regulations.
- Usage data/metrics: Product-use metrics and related information, including metrics on complaint-handling.
- Organizational structure: The organizational structure of the company, as it relates to products, during the “relevant period” (Jan. 1, 2019, through Sept. 30, 2021).
The bureau, in its notice, said it issued the orders in accordance with its market monitoring authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
Reg lookup: CFPB Inquiry Into Big Tech Payment Platforms