Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—Advocacy groups ask Congress to hold hearing on Google’s crypto intentions, (Mar 21, 2022)

By Nora Macaluso

The groups’ request follows a Biden administration executive order laying out the government’s plan to study the risks posed by digital assets.

A coalition of 17 national advocacy groups, including Better Markets, the National Community Reinvestment Coalition, and Public Citizen, has asked the House of Representatives Financial Services Committee to hold a hearing on Google’s plans to enter the cryptocurrency and digital asset markets. Committee action could “help safeguard consumers and the public interest, likely averting future monopolistic behavior” on the part of tech giants, said the group in their letter addressed to Financial Service Committee Chair Maxine Waters (D-Calif).

“Google’s announced intentions to invest in crypto markets confirms our fears that Big Tech firms continue to seek inroads into the digital assets space and aim to use their data-harvesting methods to deliver financial services in ways that are likely to increase surveillance, erode privacy, and allow these companies to dominate yet another economic and social sphere,” said Mark Hays, senior policy analyst with Americans for Financial Reform Education Fund (AFREF) and Demand Progress Education Fund (DPEF).

A hearing, Hays said, would be “one concrete first step” towards Congress’ drawing “a line in the sand.”

Sundar Pichai, CEO of Google parent Alphabet Inc. said during a recent conference call that the company was looking at blockchain and the digital “ecosystem,” the groups said. “Far from a rhetorical flirtation, the launch of Google Cloud’s “Digital Assets Team’ in January 2022 indicates that Google is serious about capitalizing off of the emerging cryptocurrency and blockchain markets,” they said.

Concerns raised during a 2019 Financial Services Committee hearing, along with pushback from regulators, policymakers, and interest groups, led Facebook—now Meta—to abandon its Libra cryptocurrency plan, the groups noted in a letter to panel Chair Maxine Waters (D-Calif.). A hearing on Google’s intentions could ensure that its entry into the field “does not come at the expense of consumers, privacy rights, and the public interest,” they said.

“Google’s documented history of deceiving consumers and violating user privacy rights further highlights the need for congressional oversight of the company’s cryptocurrency efforts,” said the letter, which linked to a January Washington Post article saying attorneys general from three states and the District of Columbia had sued the company over allegations it tricks consumers into allowing access to their location data.

Google is “currently under enormous federal, state, and international scrutiny, and additional oversight is critical to make sure that Google’s cryptocurrency ventures do not further entrench its market dominance,” the groups said.

The groups noted that their call follows a Biden administration executive order that “enumerated numerous risks posed by use of digital assets” as it outlined government efforts to study the issue. AFREF and Demand Progress, in response to the move, said lawmakers should “resist the possibility of crafting weak approaches that fail to adequately address such risks.”

Companies: Action on Race and the Economy; Americans for Financial Reform; Better Markets; Blue Future; Center for Digital Democracy; Civic Shout; Institute for Local Self Reliance; Demand Progress; Media Alliance; National Community Reinvestment Coalition; Open Markets; Progress America; Public Citizen; Revolving Door Project; RootsAction.org; Social Security Works; United We Dream

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