Key Takeaways

  • Google sued the CFPB over a recent order to supervise its payment services.
  • The CFPB cited consumer complaints and fraud allegations stemming from Google Pay operations as grounds for supervision.
  • Google argues government overreach due to the discontinuation of Google Pay in the US.



We often hear about Google and other tech giants racking up massive fines or being sued by various governments and regulators. While companies make legal efforts to contest the claims or push back, Google recently took a step we haven’t seen in a while. It sued the US Consumer Financial Protection Bureau (CFPB), challenging a recent order issued to supervise the company’s payments wing.

The GPay icon on a phone screen

Related

The Google Pay app is shutting down in the US

The app will be killed in favor of Google Wallet in June

Google has two main payment services it offers — Google Wallet and Google Pay. The latter used a peer-to-peer system for payments and was discontinued in the US earlier this year. However, it remains operational in other geos like India, where Wallet isn’t. Reuters reports the CFPB announced that it will supervise Google Payment Corp. since consumers were at risk (via Engadget).


In its announcement, the Bureau cited around 300 consumer complaints and allegations of fraud and unauthorized transactions. Google was quick to rubbish the issued order stating the service has been discontinued. However, the Bureau also said Google did not investigate these complaints or share investigative findings in sufficient detail, so the law could supervise the Google Payment Corp. even after suspension of said services.

In subsequent legal action, Google challenged the CFPB’s actions, saying it is “incapable of posing such risk” to consumers since Google Pay was discontinued, calling it “a matter of common sense”. The CFPB maintains the discontinuation of Google Pay isn’t grounds enough to refrain from supervising the company’s business.


As the government changes

A Google sign on a round awning in a city setting.



You may not have heard of the CFPB in the tech space because it typically oversees the operation of conventional financial institutions like banks, credit unions, and mortgage operations. However, Reuters claims the Bureau has been increasingly interested in payment solutions from big tech companies under the Biden administration. With the administration changing in a matter of days, Google could cling onto the hope the Bureau will shift its attention elsewhere.

While the CFPB did not comment on Google’s suit, a spokesperson for the company told TechCrunch “This is a clear case of government overreach involving Google Pay peer-to-peer payments, which never raised risks and are no longer provided in the US”.