BRUSSELS — The European Commission has decided to withdraw its proposed Financial Data Access (FiDA) regulation after receiving substantial criticism from the financial services sector and concerns voiced by the French government.

Internal documents retrieved by POLITICO indicate that the Commission plans to abandon the regulation within six months, citing a misalignment with its current objectives and the complexity it introduces for financial actors.

Originally introduced in June 2023, the FiDA regulation aimed to enhance individual empowerment by mandating financial institutions to share customer data with clients and competitors.

This included banks, asset managers, and insurers, which would have been required to disclose information held on their customers.

Following the Commission's initial proposal, EU member states reached an agreement on the draft laws in December 2023, which set a foundation for negotiations with EU lawmakers to finalize the regulations.

Proponents of the regulation argued that the new data-sharing framework would enable financial services to offer more tailored products and services aligned with consumer needs.

However, six industry associations, representing banks, insurers, and asset managers, criticized the proposal sharply, asserting that the Commission had underestimated the associated costs and failed to demonstrate sufficient market demand for data-driven financial services.

They highlighted that several critical concerns had not been adequately addressed.

Florence Lustman, chair of the French Insurance Federation, referred to the bill as a "runaway train speeding ahead with no driver and no brakes" during an interview in September.

Support for the industry's opposition was echoed by the French government.

An official note suggested a need for a comprehensive reassessment of the regulation's potential impacts on the European economy, expressing a preference for modifications to the FiDA text, if not its outright withdrawal.

Concerns were also raised that the proposed regulation could disproportionately benefit technology companies by granting them easier access to sensitive consumer financial data, which could intensify competition against traditional financial services.

In response to these concerns, EU lawmakers and member states have signaled intentions to implement stricter regulations targeting major corporations, often referred to as "gatekeepers," which include Apple, Amazon, Alphabet, Booking.com, Meta Platforms, ByteDance, and Microsoft.

As of now, the European Commission has not commented officially on the future of the FiDA proposal, choosing neither to confirm nor deny reports regarding its prospective withdrawal.