On Wednesday, Germany’s antitrust authority, the Federal Cartel Office said that PayPal’s ban on online merchants from charging payment fees might hurt open competition and face legal challenges.
PayPal is primarily one of the most common ways to pay online in Germany further explained that it does not share the initial assessment findings but will continue to participate constructively in the proceedings.
Meanwhile, the cartel office which opened an investigation in 2023 said that PayPal charges above-average fees, outperforming alternative payment methods and commanding a dominant market share.
The office said that it was also considering whether PayPal may have to hand over profits it has gained through the practice and that PayPal now had the opportunity to comment on its preliminary findings.
A statement from the cartel office reads: “As long as PayPal has to be offered without extra charge, consumers have fewer incentives for using another payment method, which would also reduce the competitive pressure on PayPal’s merchant fees.”
The office further states that it was also evaluating whether PayPal might be forced to disgorge profits gained through the practice, noting that PayPal has now been granted the opportunity to respond to its preliminary findings.
