On 25 October 2022, the FCA published Discussion paper DP22/5 on the potential competition impacts of Big Tech entry and expansion in retail financial services.

The Discussion Paper notes that Big Tech firms’ presence internationally and in UK financial services markets has been increasing, with the potential to grow and change market outcomes quickly. Big Tech firms can provide innovative and efficient products and services. However, in the FCA’s view, based on evidence from Big Tech firms’ core markets and their expanding ecosystems, competition risks could arise in the future from them rapidly gaining market share, markets ‘tipping’ in their favour, and potential exploitation of market power that would be harmful to competition and consumer outcomes.

As a result of this, the purpose of the Discussion Paper is to stimulate a discussion on the potential competition impacts identified using existing research to inform the FCA’s approach to Big Tech firms.

The FCA wants to hear views about where Big Tech entry is likely to create the biggest competition benefits for consumers and those areas where there is the greatest risk of significant harm if competition develops in a particular way. The FCA has focused its analysis on four retail sectors: (i) payments; (ii) deposit taking; (iii) consumer credit; and (iv) insurance.

The deadline for comments to DP22/5 is 15 January 2023. The FCA will be hosting an expert panel event on 28 November 2022, followed by sector specific workshops on 6 and 7 December 2022.

The FCA plans to publish a Feedback Statement in the first half of 2023 setting out how it will develop its regulatory approach in response to the feedback received.