Germany’s competition watchdog is reportedly investigating PayPal over possible obstruction of its competitors.
The head of that country’s Federal Cartel Office says he is examining whether PayPal’s user terms harm customers or sellers, Bloomberg News reported Monday (Jan. 23).
“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 told Bloomberg. “If businesses are prevented from taking into account the costs of payment methods, new payment methods can fare worse in price and quality competition or not even get into the market.”
PYMNTS has reached out to Paypal for comment but has not yet received a reply.
The Bloomberg report notes that the investigation is one among many involving the German regulator and American Big Tech firms, with cases pending against Facebook, Apple, Google, and Amazon, which — PYMNTS wrote in November — is the subject of two probes.
“We are examining in both proceedings whether and how Amazon impedes the business opportunities of sellers that are active on the Amazon marketplace and compete with Amazon’s own retail business,” Mundt said at the time.
“Amazon operates the most important marketplace in eCommerce and thus has a key position in that area, which allows the company to set far-reaching rules for competition on its platform,” he added. “Our new competencies, which are precisely intended to restrict such power to set rules, allow us to intervene more efficiently against Amazon’s anti-competitive practices.”
The report came the same day as the news that America’s big banks were hoping to take on PayPal and Apple Pay with a new digital wallet operated by Early Warning Services.
As noted here, PayPal may prove to be the more formidable foe of the two companies. Even with its growth slowing, it has 432 million active accounts, “a strong showing and an entrenched, installed base.”
At 15%, the number of payment transactions has been climbing faster than accounts, a sign of repeat usage.
“Users, of course, have bank-issued cards in the digital wallet functionality offered by PayPal (the company’s eponymous Checkout function lets members bypass filling in details and pay with credit and debit cards),” PYMNTS wrote.
“There may be some headwind in the banks gaining digital wallet share from PayPal, where those bank account/card details are already stored.”
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