French government warns of big tech’s control over payment services

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The French privacy watchdog is once more nipping at the heels of the usual American technology giants

Digital payment services developed by U.S. tech giants such as Apple and Google risk reinforcing their market power, according to a report this week in Reuters.

The payment systems strengthen big tech’s market power by giving them greater sway over consumers’ data, France’s antitrust authority said on Thursday.

The remarks are part of a 127-page opinion, Reuters says. They follow a one-year inquiry into new payment technologies and shine a light on the watchdog’s views in the field.

Their finding, according to Reuters is marked by a proliferation of smartphone banking apps, such as Britain’s Revolut and Germany’s N26.

The large number of users give big tech a market advantage

In its opinion, the French watchdog says that Apple, Google and Amazon’s payment services enjoy important competitive advantages thanks to the large number of users their platforms have attracted and the trove of data they’ve collected.

These allow them to better evaluate their users’ financial health and to adapt their offers, they say. Such adaptation includes estimating the maximum price a customer is willing to pay for a product or a service.

“Near Field Communication” (NFC) technology, the most-used short-range wireless tool to make contactless payments, can also constitute an entry barrier for potential competitors, depending on access granted by smartphone makers or operating systems, the watchdog says.

Apple Pay is only available on iPhones and is the only tool able to use the NFC contactless technology on these smartphones, for instance.

The biggest tech firms also have such financial firepower, the watchdog says, that they can invest vast sums to better integrate payment tools into their systems, thus heightening the risk of locking in consumers into their platform.

Apple Pay has already attracted regulatory scrutiny from the European Commision, as part of an investigation launched last year.