PayPal faces antitrust investigation in Germany
Germany’s Federal Cartel Office, the Bundeskartellamt, has initiated proceedings against PayPal regarding what the regulator refers to as “practices possibly foreclosing competitors and restricting price competition”.
Germany’s Federal Cartel Office is investigating PayPal
The Bundeskartellamt’s action is concerned with PayPal’s terms and conditions, which the regulator claims prevent merchants from offering goods or services at lower prices if customers choose a payment method that is cheaper than PayPal.
Additionally, sellers are “not allowed to express a preference for payment methods other than PayPal or, for example, make their use more convenient for customers”, the regulator says.
The Bundeskartellamt claims these terms may make it “more difficult” for other payment methods to “compete successfully” with PayPal or to enter the market in the first place.
Bundeskartellamt president Andreas Mundt says: “These clauses might restrict competition and violate the prohibition of abuse of a dominant position.
“We will now assess the extent of PayPal’s market power and in how far online sellers depend on offering PayPal as a payment method.”
The Bundeskartellamt cites market studies that show PayPal is both the leading online payment method in Germany and one of the most expensive.
The regulator says the antitrust proceeding is based on legislation that prohibits the abuse of a dominant position as well as potential anti-competitive agreements violations.
