PayPal has fallen foul of antitrust investigators in Germany – where the Federal Cartel Office (FCO) has announced it’s looking into its rules on surcharges.
PayPal Germany hit with regulatory probe
Germany’s cartel office said it had initiated proceedings against payment PayPal Europe over the possibility that it hindered competition.
The subject of the proceedings is PayPal’s rules for extra charges and the presentation of PayPal in the terms of use for Germany, the watchdog said.
The regulator is investigating, in particular, rules that say merchants may not offer their goods and services at a lower price to customers who choose a cheaper payment method than PayPal.
PayPal demands that sellers do not express a preference for other payment methods or make their use more convenient for customers, according to the antitrust watchdog.
“These clauses could restrict competition and constitute a violation of the prohibition of abuse,” said Andreas Mundt, Chief of the Cartel Office.
“We will now examine what market power PayPal has and to what extent online merchants are dependent on offering PayPal as a payment method.”
“The fees to be paid by sellers for using a payment service vary considerably depending on the payment method,” the FCO explained in a press release.
“Retailers usually pass these fees on to the product prices, so that consumers ultimately bear the costs of the payment services, even if these – unlike shipping costs, for example – are usually not reported separately to consumers.
According to market studies, PayPal is not only the leading provider of online payments in Germany but also one of the most expensive online payment services.
According to PayPal’s price list, it’s standard fee in Germany is currently 2.49% – 2.99% of the payment amount plus 34-39 cents per payment.”
The watchdog is closely watching internet companies to ensure fair competition.
Changes to Germany’s antitrust laws for digital corporations, which came into effect in 2021, give the cartel office more power in identifying and prohibiting some companies’ dominant positions.
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