BigTech must get back to the spirit of fintech, says report

By Roger Baird on 14th March 2019

Fintech

BigTechs should be forced to drop their “bullying tactics”, says a government-backed report.

BigTech must get back to the spirit of fintech, says report

US BigTechs should be forced to drop their “bullying tactics” and get back to the innovation shown by UK fintechs, according to a new report.

A six-month review of the technology sector has concluded tech giants such as Facebook and Google should face greater competition.

The government-backed report was led by Harvard professor Jason Furman, who was US President Barack Obama's economic advisor.

BigTech giants, such as Amazon and Google, have faced calls for tough new legislation for pushing out rivals, paying low rates of tax and selling consumer data to third parties without their customer’s knowledge. Swedish music streaming service Spotify yesterday lodged a complaint to the European Commission against US tech giant Apple arguing that the iPhone maker "deliberately disadvantages" other app developers.

Among its findings, the Furhman report proposes a new digital market watchdog to police BigTech with “legal powers to back it up”. It adds that UK market regulator the Competition and Markets Authority should have to power to “stop digital mergers that are likely to damage future competition”, and consumers should have greater control over their own data.

The 150-page review, called Unlocking Digital Competition, points to the UK’s fintech industry, led by firms such as Monzo and Funding Circle, as a competitive market that boosts consumer choice.

It said: “The UK is a great place to start a fintech company in part because of Open Banking, and the approach of the Financial Conduct Authority and the Payment Systems Regulator. Applying similar regulatory principles can improve the economic environment in the UK for digital start-ups and scale-ups while creating more predictability for large incumbent firms.”

Chancellor Philip Hammond welcomed Furham’s report in yesterday’s Spring Statement, adding that Britain “will be a place where successful global tech giants pay their fair share, where competition policy works in consumers’ interests, and where the public are protected from online harms.”

He said he has asked the Competition and Markets Authority to study the UK’s digital advertising market, dominated by Google and Facebook, “as soon as possible”.

The government added it would give its full response to the Furhman report in the summer.

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