 BIG TECH BANKINGMiguel de la Mano and Jorge Padilla Journal of Competition Law and Economics, 2018, vol. 14, issue 4, 494-526 Abstract: In this paper we explore the likely implications of the entry of Big Tech platforms into retail banking and the appropriate response of regulators and policy makers to this new industry development. We find that the entry of Big Tech platforms may transform the banking industry in radical ways: although it may possibly increase competition to the benefit of consumers in the short term, within a few years Big Tech companies may succeed in monopolizing the origination and distribution of loans to consumers and Small and Medium Enterprises (SMEs), forcing traditional banks to become “low cost manufacturers,” which merely fund the loans intermediated by the Big Techs. This situation may harm competition, reduce consumer welfare, and bring about an increase in financial instability in the medium or long term. We analyze alternative policy responses aimed at maximizing the positive impact on consumer welfare of Big Tech entry while limiting the risk of monopolization as well as the potential adverse implications of such entry on market integrity and financial stability. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:14:y:2018:i:4:p:494-526. Access Statistics for this article Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti More articles in Journal of Competition Law and Economics from Oxford University Press |
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