Australia’s competition watchdog has sided with the major banks over accusations that warning customers against using third-party fintech apps and other services that employ screen scraping constitutes an abuse of market power.
In answers to questions on notice from the senate fintech inquiry, the Australian Competition and Consumer Commission said it had decided not to open an investigation into the warnings after receiving complaints from two unnamed financial players.
The ACCC received the complaints of “anti-competitive conduct relating to the issue of banks warning their customers about screen scraping” in March after the banks appeared before a hearing of inquiry.
“The alleged conduct relates to major banks warning their customers about the security and safety dangers of screen scraping, such as the risks associated with providing sensitive information, for example passwords, to third parties,” it said.
“The complaints express concern that by warning customers of these dangers, the major banks may have discouraged customers from engaging with third-party neobanks or other financial service providers.”
After considering the “detail of the complaints and the terms of the warnings by the major banks”, the ACCC said it had found no grounds to open an investigation into anti-competitive conduct.
“The alleged conduct involves general statements or warnings regarding potential security or safety risks associated with screen scraping and sharing passwords, and does not appear to have the purpose or effect of substantially lessening competition,” it said.
“The ACCC has responded to the complainants and will continue to assess any allegations of anti-competitive conduct across the financial services sector.”
The watchdog said it currently has six investigations afoot into allegations of anti-competitive behaviour in the financial services sector and is also working on market studies into competition issues at the direction of the Treasurer.
“All of this work is intended to enhance competition in the sector for the benefit of consumers including supporting and improving the capacity of new entrants and smaller businesses to compete in the financial services sector,” it said.
CBA-Raiz dispute
One long-running battle over screen scraping warnings - which continued to play out through the inquiry - is between the Commonwealth Bank and Raiz, the micro-investing fintech previously known as Acorns.
Over the past four years, Raiz has accused CBA of waging a campaign against fintech by warning customers against sharing NetBank login details with third-party providers, resulting in “serious detriment” to its business.
“Based on our sign-up rates and other data sources, we estimate we would now have over 450,000 customers having used our product if CBA had not run such campaigns since 2016 (i.e. an additional 150,000 customers),” it said in its submission to the enquiry.
CBA, which launched its own micro-investing app, CommSec Pocket, last year, believes that sharing usernames and passwords with fintechs that use screen scraping is a “fundamentally unsafe practice”.
Figures released by the bank earlier this year indicate that “customers with logins via an aggregator are two or more times more likely to experience fraud”.
