Exclude Big Tech From Open Finance Framework, MEPs Say

April 19, 2024
Big tech “gatekeepers” such as Meta and ByteDance should not be eligible to participate in the EU’s future open finance framework, lawmakers have said.

Big tech “gatekeepers” such as Meta and ByteDance should not be eligible to participate in the EU’s future open finance framework, lawmakers have said.

Digital platforms designated as gatekeepers under the EU’s Digital Markets Act (DMA) may not be able to become financial information service providers if members of the European Parliament (MEPs) on the Economic and Monetary Affairs (ECON) Committee get their way. 

This would mean that Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft would be excluded from the framework.

According to the ECON Committee, these are platforms whose dominant online position makes it virtually impossible for businesses to reach end users if not through their gateways, and their exclusion aims to ensure that they could not circumvent the rules to control open finance markets.

The decision, made as ECON Committee members voted through their negotiating position on the Financial Data Access (FIDA) framework on April 18, has already received backlash from trade associations linked to the big tech companies. 

The Computer & Communications Industry Association (CCIA) criticised the decision in a press release, saying that the blanket exclusion is “clearly disproportionate”.

“The outright exclusion of innovative companies from a market touted as open finance contradicts the very essence of the regulation and ultimately harms consumers,” said Boniface de Champris, senior policy manager at CCIA. “This is market exclusion, not open finance.”

The policy specialist accused the ECON Committee of creating an unlevel playing field by denying innovative new entrants access to financial data, while depriving European consumers of their data protection rights. 

“Institutions should not be selecting companies to run closed markets,” he said. “We encourage all MEPs to stand by the main purpose of the FIDA proposal, which is to enhance competition, promote choice, and empower consumers.”

FIDA is intended to extend open banking provisions in the Payment Services Directive (PSD2) to other parts of finance, such as mortgages and investments. 

The MEPs also agreed in their position that data holders and data users should be allowed to use existing market standards and infrastructures for technical interfaces such as application programming interfaces (APIs) when developing common standards for mandatory data access. 

As with the original European Commission draft, MEPs agreed that data holders should be able to request reasonable compensation from data users for costs incurred in providing access and those related to putting in place and maintaining APIs.

Further, lawmakers said that the European Banking Authority (EBA) should establish a register of authorised financial information service providers, as well as financial data access schemes agreed between data holders and data users. 

MEPs also want to give small firms 12 more months than the original proposal outlined to apply the rules, to ensure their proportional involvement.

“In an ever more digitalised world, it is important that consumers and firms have more efficient control access over their financial data beyond payments,” said Michiel Hoogeveen, the MEP responsible for the file. “With open finance, they will be able to benefit from financial products and services that are better tailored to their needs”.

The file will now be followed up by a new crop of MEPs after the June 6-9 elections.

This may mean that some clauses agreed by the ECON Committee do not get voted through, as the balance of power in the parliament could change significantly. 

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