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Germany's FCO Opens Antitrust Probe Into PayPal: Report

Germany's Federal Cartel Office said that it had launched an investigation into PayPal to examine whether the US online payment giant was using its dominance to restrict competition

Germany's FCO Opens Antitrust Probe Into PayPal: Report

Outlook Start-Up Desk

POSTED ON January 24, 2023 3:51 PM

Germany's Federal Cartel Office (FCO) has opened an antitrust probe into PayPal, one of the world's largest online payment platforms. The investigation will focus on whether the company is abusing its dominant market position to limit competition, TechCrunch reported.

The FCO's probe is a response to complaints from smaller rival payment providers, who claim that PayPal is using its dominance to restrict its ability to compete in the market. According to the FCO, PayPal may be using 'tied selling' to force merchants to use its services exclusively, and also imposing 'unfair contract terms' on its partners.

"We will now examine what market power PayPal has and to what extent online retailers are dependent on offering PayPal as a payment method," said FCO president Andreas Mundt in a media statement.

The investigation is also looking into whether PayPal is blocking transactions from its platform to its competitors, which would be a violation of competition laws.

This is not the first time that PayPal has come under scrutiny for potential antitrust violations. In 2016, the European Union's antitrust regulator fined the company €1.7 billion ($1.9 billion) for anti-competitive practices in the online payments market.

PayPal, which has more than 300 million active accounts in over 200 markets, has said that it will cooperate fully with the FCO's investigation. The company has denied any wrongdoing, stating that it "has always operated in compliance with all laws and regulations, including those related to competition."

The probe is a reminder that even the largest and most powerful companies in the tech industry are not immune from antitrust scrutiny. As regulators around the world continue to take a closer look at the practices of tech giants, it remains to be seen whether PayPal will face any penalties or fines as a result of this investigation.

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