Status: 01/23/2023 12:50 p.m
The Bundeskartellamt has initiated proceedings against the online payment service PayPal. It is about the suspicion of hindering competitors and restricting price competition.
The Bundeskartellamt is examining the payment service PayPal. The Bonn competition authorities have initiated proceedings against the European subsidiary of the US group to investigate whether PayPal is exploiting a dominant position in Germany and thus impeding competition.
Specifically, it is about PayPal’s terms of use, according to which merchants are not allowed to offer their goods and services at lower prices if consumers choose a cheaper payment method than PayPal for payment.
Victims are consumers
“These clauses could restrict competition and constitute a violation of the ban on abuse,” said the President of the Cartel Office, Andreas Mundt. “The victims would then be the consumers in particular, who ultimately pay these higher costs indirectly through the product prices.”
The Cartel Office will now examine what market power PayPal has and to what extent online retailers are dependent on offering PayPal as a payment method. “If merchants are prevented from taking into account the different costs of the various payment methods with corresponding surcharges or discounts, other and new payment methods can hold their own less well in the price and quality competition,” emphasized Mundt.
PayPal is the most expensive provider for online payments
Payment services with market power could thus gain further leeway for their own pricing. Because depending on the payment service provider, the merchants have to pay different amounts in order to be able to offer this service. These fees differ significantly depending on the service provider. Retailers usually allocate the amounts to the product prices, so that consumers ultimately bear the costs.
According to studies, PayPal is not only the leading provider of online payments in Germany, but also one of the most expensive online payment services.
New powers for the Cartel Office
The Cartel Office has kept an eye on the booming Internet economy in order to secure competition in this area. In January 2021, the legislator had given the Cartel Office new instruments for this purpose. Among other things, Amazon and Facebook are now being examined more closely.