Alphabet’s (GOOGL) Google has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB) following the agency’s order to supervise Google’s payment services unit. Google argues that the CFPB’s decision is based on a limited number of user complaints and that the company has already discontinued the services in question.
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The CFPB maintains that Google’s payment division falls under its enforcement jurisdiction and now meets the legal criteria for supervision under its new regulations. The agency’s decision stems from nearly 300 consumer complaints alleging fraud, scams, and unauthorized transactions related to Google Payments.
While the order does not suggest any wrongdoing by Google, it places the company under increased regulatory scrutiny. The CFPB now has the authority to ensure compliance with consumer financial protection laws and to conduct supervisory exams, which help companies identify potential legal violations.
CFPB Deepens Supervision over Nonbank Financial Firms
The CFPB’s actions against Google are part of its broader effort to strengthen oversight of nonbank financial institutions, including major tech companies that are increasingly involved in financial services. Last month, the agency proposed new rules to directly supervise firms handling more than five million payment transactions annually. These rules would apply to about 17 firms, including Apple (AAPL) and PayPal (PYPL).
This heightened scrutiny of large tech companies comes as they expand into financial services through platforms like Apple Pay and Google Pay. Regulators aim to ensure that these companies are subject to appropriate scrutiny and do not harm consumers.
Is GOOGL Stock a Buy, Sell, or Hold?
Turning to Wall Street, GOOGL has a Strong Buy consensus rating based on 27 Buys and seven Holds assigned in the last three months. At $207.83, the average Alphabet price target implies an 18.96% upside potential. Shares of the company have gained 25.38% year-to-date.
