The Financial Conduct Authority (FCA) of the UK is launching an inquiry into Apple's financial services, like Apple Card and the new savings account, as part of what seems to be an early-stage antitrust investigation, as per 9to5Mac.
Likewise, the agency is also planning to explore means to regulate other big tech firms such as Google, Amazon, and Facebook's parent company Meta.
According to The Guardian, FCA fears that the presence of these big tech could potentially harm the competition in the financial services sector of the country.
FCA Expresses Concerns Over Apple and Other Big Tech Firms
In the field of mobile wallets, Apple became one of the biggest players when it launched a credit card and later on, a buy-now-pay-later service. Most recently, the company also launched a savings account.
For most of these services, the company has partnered with an existing bank. However, for Apple Pay Later, "the company is acting as its own bank."
According to the Consumer Financial Protection Bureau (CFPB) of the US, the use of Apple Pay Later brought a host of issues, such as antitrust and privacy concerns.
The company acquired Credit Kudos earlier this year. It is a startup company in Britain that employs a new way in order to assess "the creditworthiness of finance applicants."
The action of Apple appears to be a clear move to eventually bring the Apple Card to the said country. This caught the attention of the FCA and now the agency expressed its concern over how the company could possibly affect the financial services of Britain.
One of the concerns of FCA is the possible disruption that Apple and the other big tech firms may cause in the country's financial markets.
The agency acknowledged that the Cupertino-based company and the other big tech firms could bring innovations in the financial services of the said country.
However, FCA also expressed fears that they could dominate the market, which could lead to the "potential exploitation of market power."
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FCA Worries That Big Tech Firms Could Change UK's Financial Services
According to the agency, the iPhone-maker Apple, the Alphabet who owns Google, the giant retailer Amazon, and Meta who owns Facebook are already offering some financial services in the UK.
However, over time, the big tech firms are slowly introducing more products around the globe, including Apple's credit card and, most recently, a planned "buy now pay later" feature.
According to the agency's analysis, the entry of the big tech firms into the financial services sector could potentially benefit many consumers.
However, FCA said that the benefits "could be eroded if these firms can create and exploit entrenched market power to harm healthy competition and worsen consumer outcomes," as per The Guardian.
"In recent years, Big Tech's entry into financial services, in the UK and elsewhere, has demonstrated their potential to disrupt established markets, drive innovation and reduce costs for consumers," said Executive Director of Consumers and Competition Sheldon Mills.
Moreover, he added that the world had seen the capacity of big tech firms to bring transformative new products, including payments, deposits, and consumer credit.
FCA worries that the big tech firms could eventually act as "gatekeepers" to financial services.
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