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PayPal Under Investigation

Germany’s antitrust regulator opened an investigation into PayPal over potential obstruction of competitors and restriction of price competition.

The Federal Cartel Office is looking at the company’s user terms such as traders not being allowed to offer their goods and services at lower prices if customers choose a cheaper payment method than PayPal; and sellers not being allowed to express any preference for payment methods other than PayPal.

The regulator will also look at how the company bans sellers from making it more convenient to use other payment methods than PayPal.

“The fees to be paid by sellers for using a payment service vary considerably depending on the payment method. 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,” the FCO explained in a press release.

“We will now examine what market power PayPal has and to what extent online retailers are dependent on offering PayPal as a payment method,” Andreas Mundt, the Cartel Office’s head, said.

“If businesses are prevented from taking into account the costs of payment methods, new payment methods can fair worse in price and quality competition or not even get into the market.”

The probe adds to the long list of Silicon Valley Tech giants targeted by Mundt’s office. The office has cases pending against Amazon, Google, Facebook, and Apple. Recently, they sent Google a warning letter over their customer data terms.



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