On 20 May 2020, the French Competition Authority ("FCA") launched a public consultation intended to better understand the competitive impact of the development of new technologies in the financial sector, especially with regard to payment services.
| what you need to know - key takeaways |
- The FCA is conducting a sector inquiry on new technologies applied to financial services and, in particular, to payment services.
- Recent developments in the sector justify the need for more guidance, particularly on how relevant markets should be defined and what kind of practices are at risk.
- The outcome of the public consultation and the sector inquiry may affect the FCA's enforcement priorities.
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On 13 January 2020, the FCA launched a sector inquiry intended to better understand the impact on competition of the growing use of new technologies in the financial sector with a focus on payment services. A 20 May public consultation has been published to gather comments from stakeholders. The deadline is 19 June 2020.
According to the FCA, a number of factors are liable to impact market dynamics and the competitive behaviour of undertakings:
- The first one relates to innovation and the development of new types of services (e.g. e-wallets, new exchange instruments, crypto-assets).
- The second is the emergence of new market players, e.g. start-ups bringing about innovative services or leading digital players extending their business in the financial sector.
These coexist with financial institutions which are adapting their model through the purchase of FinTech companies, co-operations or partnerships and/or by investing in research and development.
The public consultation takes the form of a list of questions on three topics:
- The evolution of the financial sector in recent years.
- Issues related to market definition and the position held by existing market players.
- Business practices likely to be implemented by the different players and their impact on competition.
This sector inquiry is part of efforts made by the FCA in the past few years to provide stakeholders with more guidance in relation to digital markets. The FCA recently published a number of insightful papers on digital economy, including a study on "Algorithms and Competition" (6 November 2019) and another one on "Competition and E-commerce" (5 June 2020).
With thanks to Marie Florent of Ashurst for her contribution.
