US Internet Giants May Face Data Access Restrictions Under Proposed FiDA Regulation
Brussels/Frankfurt
EU Intends to Restrict Big Tech's Data Acquisition Speed
In a potential shift that could reshape the digital landscape, European Union legislators are considering barring significant digital platforms, known as 'gatekeepers', from accessing financial data of bank customers in the EU. These gatekeepers, which encompass major players like Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft, and Booking, typically offer services ranging from search engines to app stores [1].
Should the controversial EU Open Finance regulation (FiDA) be ratified, these US internet giants might find their access to European financial data limited. FiDA negotiations are underway, and the exclusion of gatekeepers from being recognized as data users represents one of the key discussions [1].
The proposed regulation, FiDA, is a significant step in the transition from open banking to open finance. Despite initial concerns about its withdrawal, it is expected to pass by the end of 2025, with full implementation projected for early 2027 [2]. The regulation aims to broaden data-sharing principles to various financial services, bolstering consumer control, fostering innovation, and increasing competition within the sector [2][5].
The potential impact of FiDA on US internet giants can be summarized as follows:
- Data Access and Control: By granting explicit customer data access rights, FiDA enforces new rules on data users, mandating cooperation through financial data sharing. This could potentially limit the control these giants have over financial data in Europe as consumers gain more control [2].
- Competition and Innovation: Greater data accessibility and interoperability, key aspects of FiDA, aim to stimulate competition and innovation in the financial sector. European financial institutions may find it harder for US giants to compete without adapting to the regulatory changes [5].
- Barriers to Entry: The new data-sharing requirements could pose barriers to entry for data-heavy companies from outside the EU, potentially affecting the competitive advantage enjoyed by US giants in the European market [5].
- Global Competitiveness: FiDA could elevate Europe's global competitiveness in financial technology, positioning it as a leader in open finance. This shift might challenge the dominance of US giants in offering superior customer experiences [5].
In summary, the proposed FiDA regulation could limit the control of US internet giants over financial data in Europe, promote greater competition, and potentially decrease their market share if they fail to adapt to the new regulatory landscape.
Sources:1. https://www.europarl.europa.eu/news/en/headlines/politics/20230214STO12750/us-internet-giants-to-face-data-access-restrictions-under-proposed-fida-regulation2. https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12473-EU-Financial-Data-Access-(FiDA)-Regulation3. https://ec.europa.eu/info/business-economy-euro/banking-and-finance/overview-financial-services-sector/banking/open-banking/open-banking-explained_en4. https://www.ft.com/content/c1bb96b8-2c74-4284-99bb-423f2ea94f105. https://www.euractiv.com/section/euro-finance/news/eu-outlines-visions-for-open-finance/
- TheFiDA regulation, aiming to broaden data-sharing principles, could potentially limit the access of US technology companies, such as Alphabet, Apple, and Meta, to European business and financial data.
- As European Union legislators discuss restricting access to financial data for significant digital platforms, governments may find it challenging for businesses like Amazon and Booking to maintain their dominant position in the European market, considering the proposed FiDA regulation.
