The Federal Cartel Office has initiated proceedings against PayPal

The Federal Cartel Office has initiated proceedings against PayPal

The Bundeskartellamt has taken legal action against the financial company PayPal Europe for possible anti-competitive behavior on the market. The subject of the proceedings were additional fees from PayPal customers, the ban on price competition and violations of the terms of use of the payment system in Germany.

    Credit: REUTERS/Dado Ruvic/Illustration

Credit: REUTERS/Dado Ruvic/Illustration

PayPal has not yet commented on the situation. The German regulatory authority is now examining the rules set up by PayPal, according to which sellers are not allowed to reduce the price for customers who have chosen a cheaper payment method than PayPal. The antitrust authorities claim that PayPal requires merchants not to use other payment methods, let alone improve their customer experience.

“These demands off PayPal can restrict competition, violate the prohibition on abuse and even block new services and products from entering the market, — said the head of the Antitrust Office Andreas Mundt (Andreas Mundt). — We will now examine PayPal’s market power and the extent to which online retailers rely on PayPal as a payment method.”

The regulator closely monitors internet companies to ensure fair competition. Changes to German antitrust law for digital groups, which will come into force in 2021, give the antitrust authority more powers to uncover and prohibit the dominant position of certain companies. The PayPal investigation adds to a long list of cases against Silicon Valley’s tech giants that Mundt’s office has targeted. The antitrust authorities have filed lawsuits against Amazon, Google and Facebook* and apple. Google also recently received a warning from the German cartel office.

* It is included in the list of public associations and religious organizations for which the court made a final decision to liquidate or ban activities on the grounds provided for in Federal Law No. 114-FZ of July 25. 2002 “On Countering Extremist Activities”.

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Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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