Big tech companies are about to face questions from the government on another front: how they use consumers’ financial and other information.
The Consumer Financial Protection Bureau is poised to examine consumer data practices at Amazon.com Inc., Apple Inc., Alphabet Inc.’s Google and Facebook Inc. and other firms, according to people familiar with the matter. The move would open a new front in Washington’s scrutiny of the firms.
The bureau is expected Thursday to issue orders seeking information from the companies, the people said. All of the companies are engaged in consumer-facing financial services or have ambitions to expand in that sector.
A CFPB spokesman declined to comment.
The questions from the agency will be broad in scope, the people said. They will likely range from inquiries about how consumer data that flows through the companies is used in lending decisions to how data determines what ads consumers are shown, the people said. In all, the companies are expected to face demands to answer dozens of questions while the bureau also seeks public comment on the requests, the people said.
The action by the CFPB is the latest move by the Biden administration to scrutinize big technology companies. It has appointed individuals who say lax antitrust enforcement, especially in the tech sector, has allowed dominant firms to hobble rivals and stifle competition. They include Federal Trade Commission Chairwoman Lina Khan and Tim Wu, special assistant to the president for technology and competition policy.
Republican and Democratic lawmakers have also called for tougher regulation, such as strengthening privacy and competition laws.
Rohit Chopra, who was sworn in as the CFPB’s new director on Oct. 12, previously worked with Ms. Khan at the FTC. He told Senate lawmakers he would make it a priority to look into issues such as data privacy. While at the FTC in 2019, Mr. Chopra joined another Democrat in objecting to a $5 billion settlement with Facebook over a probe into the tech giant’s privacy missteps, contending it wasn’t tough enough.
“It will…be critical for the CFPB to take a hard look at how big tech companies and others are entering financial services, the impact on our privacy and our personal data,” he said at a March hearing.
Other firms subject to the information demands are expected to include payment processors Square Inc. and PayPal Holdings Inc., the people said.
A Facebook spokesman declined to comment. An Amazon spokeswoman didn’t comment. Representatives of Apple, Google, Square and PayPal didn’t immediately respond to requests for comment.
The CFPB has been politically polarizing since former President Barack Obama tapped Elizabeth Warren, then a Harvard law professor, to set it up. Ms. Warren, a Democrat, is now a U.S. senator representing Massachusetts.
Democrats have wanted a muscular CFPB to take on what they characterize as financial-industry excesses. Republicans and Wall Street firms have criticized the bureau as an instrument of excessive government regulation, with too much power over a significant slice of the economy.
The CFPB’s expected questioning of tech firms comes as big technology firms increasingly offer financial services. The banking industry, a frequent target of CFPB rules, is likely to welcome the move to scrutinize technology firms, as it could put the companies on a more level playing field with lenders, the people said.
The CFPB’s demands from the companies could presage a push to make it easier for consumers to switch between financial firms. A July executive order from Mr. Biden encouraged the CFPB to issue rules allowing customers to download their banking data and take it to another institution. The directive was part of a broader executive order aimed at promoting competition in a number of industries.
Write to Andrew Ackerman at [email protected] and AnnaMaria Andriotis at [email protected]
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