White Label: The Technological Illusion of Competition

Abstract

This article looks at the competition (or lack thereof) in the U.S. and EU financial service markets and how innovative companies have decided to enter the market. Over the years, many start-ups have ventured into financial services; however, they have faced heavy regulations. These regulations have led these companies to using a “white label” business model. This model has wide competition law implications: some good (e.g., more innovation at different levels of financial services) and some bad (e.g., innovative companies being bought out). These start-ups do not provide the competition first hoped while competition authorities and regulators often lag behind the technology to act and preserve competition before it is too late. This article makes some recommendations how the U.S. and EU competition authorities can learn from each other’s mistakes.