During his time on the Federal Trade Commission, Rohit Chopra made a point of scrutinizing the business practices of big technology companies such as Facebook, Google and Amazon.
Now, much to the delight of progressives in Washington, he appears to be bringing the same focus to his new job as leader of the Consumer Financial Protection Bureau.
Earlier in October, in one of Chopra’s first acts as director, the agency ordered six major technology companies to come forward with information on their payment systems and how they manage personal user data related to payments and financial information. The companies targeted by the CFPB probe are Amazon, Apple, Facebook, Google, PayPal and Square.
In a statement accompanying the order, Chopra acknowledged that innovative payment systems could have positive benefits for consumers and small-business owners alike. But he said that in the hands of companies that already wield considerable market power and possess huge swaths of data on their users’ private lives, such systems could be abused.
“This data can be monetized by companies that seek to profit from behavioral targeting, particularly around advertising and e-commerce,” Chopra said. “That many Big Tech companies aspire to grow in this space only heightens these concerns.”
Groups aligned with the technology industry are already pushing back on Chopra’s demands. Carl Szabo, vice president of NetChoice, a coalition with members including Facebook, Google and Amazon, said the CFPB inquiry shows “a lack of appreciation for the consumer benefit that has emerged from the growing ecosystem of digital payment services.”
“Consumers can choose between services offered by businesses with strong records on privacy issues, while others may prioritize other factors,” Szabo said. “Instead, Chopra is searching for a problem to satisfy his desire for government intervention, regardless of whether consumers would actually benefit.”
While serving as one of two Democratic commissioners on the five-member Federal Trade Commission, Chopra was an outspoken critic of practices by big companies, especially tech giant Facebook. He lodged strong dissents on FTC actions against the company for privacy violations and alleged anti-competitive conduct, saying they didn’t go far enough.
Chopra’s appointment to head the CFPB, which opened under President Obama and languished during the Trump administration, marked something of a homecoming. Chopra, a Harvard University graduate from New Jersey, helped launch the consumer agency after the 2008-09 financial crisis and served as deputy director, where he sounded the alarm about skyrocketing levels of student loan debt.
While it enforces consumer-protection laws, the CFPB also can scrutinize the practices of virtually any business selling financial products and services. Chopra was a deputy to its first director, Richard Cordray, as the agency undertook enforcement actions against an array of companies large and small, and returned tens of billions of dollars to consumers harmed by illegal practices.
The technology sector has attracted significant attention from lawmakers, regulators and consumer welfare advocates in recent years, with the focus on data privacy, competition and content moderation. But starting in 2019, largely with Facebook’s announcement that it planned to launch a digital currency, the emphasis has grown to include financial systems.
Sen. Sherrod Brown, the chairman of the Senate Banking Committee, said in a statement that the expansion by technology companies into the financial sector “is deeply concerning.”
“No one should have to worry about their information — including their financial records — being bought and sold or stolen,” the Ohio Democrat said.
Chopra, who was confirmed by the Senate in a 50-48 vote in September and was sworn in Oct. 12, has long had the backing of Democrats such as Brown and Sen. Elizabeth Warren, who was his boss during his first stint at CFPB, when she was the agency’s inaugural director.
His probe of Big Tech’s payment systems has won him further plaudits.
“[This] is what Americans need and expect from financial regulators,” Robert Weissman, president of the advocacy group Public Citizen, said in a statement. “CFPB was designed to protect us from unfair practices, especially corporate schemes that a regular person can’t possibly know are occurring, and it’s doing just that under Chopra’s leadership.”
Sarah Miller, president of the American Economic Liberties Project, an organization that seeks to break up monopolies in the technology sector and other industries, said the probe could be a crucial step toward preventing the companies from dominating another area of the economy.
“A week in, Chopra is already proving he knows how to use his authority to stand up to Big Tech,” Miller said in a statement. “The CFPB’s orders will force Big Tech to come clean on their surveillance, data collection, and payments systems and provide regulators another important window in their sprawling empires.”