Why Google has sued US government

Google has sued the United States Government owned Consumer Financial Protection Bureau (CFPB) in the United States over a recent order to supervise its payment services.

The CFPB is an independent agency of the United States government responsible for consumer protection in the financial sector.

CFPB’s jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, for-profit colleges, and other financial companies operating in the United States.

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.

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.

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.

Will Google win this legal tussle?
As the government changes

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, Diaspora Digital Media understands 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 said, “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”.

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