Feds probing Apple & big tech companies about digital payment systems [u]

AppleInsider · October 21, 2021 1:49PM

The U.S. Consumer Financial Protection Bureau has launched a probe into the consumer data and financial practices of digital payment systems including Apple Pay, Google, PayPal, and others.

Credit: Consumer Financial Protection Bureau

Following a Wall Street Journal report that the CFPB was to query big tech firms about data use, it has now been revealed that the probe is into management of digital payment systems.

"Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits," said CFPB director Rohit Chopra in a statement. "We have ordered them to produce information about their business plans and practices."

"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," continued Chopra. "The orders were issued to Google, Apple, Facebook, Amazon, Square, and PayPal."

Chopra says that digital payment systems "offer significant potential benefits" to businesses and individuals, but that there is a risk to having technology firms monetizing the consumer behavior data they collect in the process.

"That many Big Tech companies aspire to grow in this space only heightens these concerns," he said.

The CFPB reports that it will also study the practices of the Chinese tech giants that offer payments services, such as WeChatPay and Alipay.

Sources familiar with the move told The Wall Street Journal that the agency's questions will be broad in scope, and could include inquiries about how consumer data collected by the companies is used in lending decisions or how consumer data is used to target ads.

In addition, the bureau is also expected to seek public comment on the matter.

The probe is only the latest move by the U.S. government scrutinizing Silicon Valley tech giants. The House of Representatives, for example, is considering a sweeping legislative package meant to curb the power of Big Tech. Those bills were put forth in the House after a monthslong investigation into the competitive landscape of the technology industry.

In the Senate, there have been similar moves to introduce legislation meant to rein in Silicon Valley. Back in August, the Senate introduced a bill targeting the Apple App Store and the Google Play Store.

Under President Joe Biden, a number of Big Tech skeptics have also been appointed to key antitrust enforcement positions. That includes Lina Khan, the current chair of the Federal Trade Commission and a legal scholar who has researched technology markets.

Update 1:00 PM Eastern time: The Wall Street Journal misinterpreted its sources and called it a consumer data-centric investigation rather than one focusing more on payment systems. The story has been updated with the actual scope of the inquiry.

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ihatescreennames · October 21, 2021 2:05PM

I would like it if companies were prohibited from getting information about me, without my permission, from my friends, family, etc. For instance, how much of my personal information does FB have because it's included in the contacts that my friends have chosen to give FB access to? I would like that to be zero.

hammeroftruth · October 21, 2021 2:09PM

ihatescreennames said:

I would like it if companies were prohibited from getting information about me, without my permission, from my friends, family, etc. For instance, how much of my personal information does FB have because it's included in the contacts that my friends have chosen to give FB access to? I would like that to be zero.

The only way around that I found is a fake profile. You interact with your f&f and let them know that it’s you, but everyone else see’s a bogus profile. Either that, or stay off social media. Their income IS your info.

ihatescreennames · October 21, 2021 4:10PM

hammeroftruth said:

ihatescreennames said:

I would like it if companies were prohibited from getting information about me, without my permission, from my friends, family, etc. For instance, how much of my personal information does FB have because it's included in the contacts that my friends have chosen to give FB access to? I would like that to be zero.

The only way around that I found is a fake profile. You interact with your f&f and let them know that it’s you, but everyone else see’s a bogus profile. Either that, or stay off social media. Their income IS your info.

I’m not on social media but I’m sure social media has my info just from what they glean from other people. That is a practice I would like to see end. Why should Facebook, et al, collect information about me by getting access to my mother’s contacts? (As an example)

PERockwell · October 21, 2021 4:21PM

Why does the idea of lumping Apple in with the likes of Google and Facebook seem like a game of “which of these is not like the others”?

bestkeptsecret · October 22, 2021 10:46AM

PERockwell said:

Why does the idea of lumping Apple in with the likes of Google and Facebook seem like a game of “which of these is not like the others”?

The criteria for lumping Apple with the others is "big tech offering payment system". If sanity prevails, the investigators will realise that one is not like the others.

bobolicious · October 22, 2021 1:33PM

bestkeptsecret said:

PERockwell said:

Why does the idea of lumping Apple in with the likes of Google and Facebook seem like a game of “which of these is not like the others”?

The criteria for lumping Apple with the others is "big tech offering payment system". If sanity prevails, the investigators will realise that one is not like the others.

As CSAM may have illustrated is the system largely in place under a representation of privacy? Does it only take one friend to sync using iCloud to offer up others' data without consent including perhaps even photos stored in contacts? Additionally iCloud mail is unencrypted per: "support.apple.com/en-us/HT202303" leaving the technical onus of S/MIME to the user including the ongoing cost of certificate(s), and Apple has acknowledged having iCloud keys for the rest. Is it important to keep in mind while Apple may represent the data is not monetized directly at present if one thinks of all the data Apple may be collecting including watch, searches, TV, payments, health, iPhone use, etc. is it daunting? Derivative 'anonymized' data remains an additional question with some suggesting 'anonymized' may be a potentially thin veil:

spreadprivacy.com/data-anonymization/
georgetownlawtechreview.org/re-identification-of-anonymized-data/GLTR-04-2017/
dataprivacylab.org/projects/identifiability/paper1.pdf

I am reminded at most checkouts now where I am generally only asked 'debit or credit', and of the phrase 'cash is king'...

badmonk · October 22, 2021 6:30PM

The fact that they submitted this request to six different companies tells us that there is healthy competition here.

Maybe the issue is associated data mining in which case they are showing some foresight.

Meanwhile the social media monopoly and corrosion of FB, the search & video monopoly of Alphabet and the on-line marketplace monopoly of Amazon go unchallenged.

Is all this just a failure of imagination of investigators?

gatorguy · October 22, 2021 7:16PM

badmonk said:

The fact that they submitted this request to six different companies tells us that there is healthy competition here.

Maybe the issue is associated data mining in which case they are showing some foresight.

Meanwhile the social media monopoly and corrosion of FB, the search & video monopoly of Alphabet and the on-line marketplace monopoly of Amazon go unchallenged.

Is all this just a failure of imagination of investigators?

You need to catch up on your antitrust investigations. None of those are unchallenged.

Feds probing Apple & big tech companies about digital payment systems [u]

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