The Financial Conduct Authority has published the feedback statements for its 2022 Discussion Paper focusing on the competition impacts of Big Tech entry. The Discussion Paper aimed to gain insight into areas where the entry of Big Tech could offer the biggest competition benefits for consumers.

Moreover, the FCA wanted to find out which areas are the most vulnerable if competition doesn’t develop effectively. Discussion Paper (DP22/5) was launched in 2022, and since then, the UK-based regulatory body has received responses from various stakeholders such as Big Tech firms, trade associations, challenger firms, regulated financial services firms, consumer organisations, and research institutions. To gather views, the FCA also organised a webinar as well as roundtable events for industry participants.

The FCA gathered these responses and put together a statement that includes feedback on its analytical entry framework and entry scenarios, as well as feedback on potential competition benefits and harms, and feedback on stakeholder regulatory concerns. The FCA is also outlining its future actions and next steps. Following the aforementioned engagement events, the regulator observed the emergence of key themes related to data access and data sharing, overlaps with regulators and other regimes, Big Tech activity at, or beyond, the FCA’s regulatory perimeter, and differing tech business models and strategies.

The Feedback Statement addresses any entity that has an interest in the potential competition impacts of Big Tech entry and expansion in retail financial services. These include large tech firms, established regulated financial services firms, trade bodies of regulated firms, smaller challenger firms, consumers, groups that represent the interests of consumers, as well as national and international competition authorities and regulators with an interest in digital markets. What does the FCA plan to do next? The FCA’s strategy for the future involves the shaping of digital markets to achieve positive outcomes, including Open Banking and Open Finance developments, as well as the development of regulatory approaches for Critical Third Parties (CTPs) and artificial intelligence (AI).

By the end of 2023, the FCA is looking to launch a call for input on Big Tech firms as ‘gatekeepers’ and key drivers including the role of data sharing asymmetry between these companies and financial services. The regulator wants to continue working with the Government and the Digital Markets Unit (DMU) as the new Digital Markets, Competition and Consumers Bill passes through Parliament. Also on the agenda is a reviewing process of the supervisory approach for Big Tech firms in the context of their activity across different financial sectors.

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