Senate inquiry asks whether Facebook, Google should be regulated like banks
Technology giants including Google and Facebook are disrupting financial services by steadily moving into the banking space.
These tech giants are among a string of other US digital players and Chinese companies that already have detailed data on their users — including, what, how, when and where they spend.
It has Liberal senator Andrew Bragg, who chairs the Senate select committee running the Federal Government’s inquiry into financial technology (fintech), worried.
The inquiry — which in September handed down an interim report into other issues including regulation of buy now, pay later platforms such as Afterpay and Zip — is now examining whether it is dangerous to have large tech giants offering banking or other financial services.
Senator Bragg says our personal data has become an asset and the tech giants could be regulated so they use it fairly.
Should tech giants get accredited under Consumer Data Right?
It comes amid the rollout of the Government’s Consumer Data Right (CDR) scheme, which aims to give Australians more agency to access and control parts of their personal information.
Senator Bragg calls it a “game changer”, although critics have pointed out that without careful consideration, it could have serious privacy implications, among other concerns.
He says the inquiry will explore the potential for big non-bank technology companies to become accredited data recipients under the CDR regime.
“A question the committee is going to ask is, ‘What happens if Google becomes a bank?'” Senator Bragg said.
“Can it access the CDR on the same basis that a Sydney startup can?
“There’s a huge concentration of data and power in big tech companies.”
Senator Bragg noted recent policy changes, including the news media bargaining code by consumer watchdog ACCC which was designed to address the bargaining power imbalance between Australian news media businesses and Google and Facebook.
“Australia is in many ways leading the world, alongside the United Kingdom and California, with this data-sharing concept,” he said.
“It’s important that we have less concentration, not more.”
Push for a digital identity
The second part of the Government’s fintech review will examine a host of other issues, including a new digital identity for Australian citizens which could draw data from peoples’ myGov accounts.
The inquiry’s interim report supported the existing move towards a digital identity, which would allow citizens to verify their identity when applying for passports, drivers licences, Medicare cards and access to government services.
But in its dissenting report, Labor said it did not want to see this change rushed out, arguing the infrastructure to enable it was not yet adequate and the community still had concerns.
It noted feedback on the Government’s COVIDSafe app showed the Digital Transformation Agency, which is the same agency behind the planned rollout of the digital identity scheme, “[doesn’t] consult well with the broader tech community”.
Senator Bragg said the Federal Budget included $256.6 million over two years from 2020-21 to continue development and expansion of digital identity.
He said the committee was interested in exploring how a single digital channel to government could streamline the interactions of businesses and individuals with government and make way for better delivery of services.
“Data security is a critical issue for all tech firms, including startups and scaleups,” Senator Bragg said.
He said the inquiry would also explore further initiatives to make Australian startups and scaleups more attractive to overseas capital and investment and how to manage data collection “sensitivities” when there was foreign investment in local fintechs and startups.
He said recent developments in Hong Kong also presented a unique opportunity for Australia to develop its status as a regional centre for financial and technology services.
“The committee is interested in ideas to attract business from Hong Kong … and is particularly interested in how Australia could enact a tax regime which makes our country attractive to the world’s brightest minds,” he said.
The committee’s final report will be handed down in April.