Potential competition impacts from the data asymmetry between Big Tech firms and firms in financial services

Report by the UK Financial Conduct Authority: “Big Tech firms in the UK and around the world have been, and continue to be, under active scrutiny by competition and regulatory authorities. This is because some of these large technology firms may have both the ability and the incentive to shape digital markets by protecting existing market power and extending it into new markets.
Concentration in some digital markets, and Big Tech firms’ key role, has been widely discussed, including in our DP22/05. This reflects both the characteristics of digital markets and the characteristics and behaviours of Big Tech firms themselves. Although Big Tech firms have different business models, common characteristics include their global scale and access to a large installed user base, rich data about their users, advanced data analytics and technology, influence over decision making and defaults, ecosystems of complementary products and strategic behaviours, including acquisition strategies.
Through our work, we aim to mitigate the risk of competition in retail financial markets evolving in a way that results in some Big Tech firms gaining entrenched market power, as seen in other sectors and jurisdictions, while enabling the potential competition benefits that come from Big Tech firms providing challenge to incumbent financial services firms…(More)”.