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German antitrust authority says PayPal practices may restrict competition - Finance news and analysis from Global Banking & Finance Review
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German antitrust authority says PayPal practices may restrict competition

Published by Global Banking & Finance Review

Posted on November 11, 2026

1 min read

· Last updated: November 11, 2026

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German Antitrust Authority: PayPal Practices May Restrict Competition and Violate Law

Overview of the Federal Cartel Office's Concerns

Background of the Investigation

FRANKFURT, Nov 11 (Reuters) - Germany's antitrust authority, the Federal Cartel Office, said on Wednesday that PayPal's prohibition against online merchants charging customers extra fees to use the payment method may restrict competition and violate the law.

PayPal's Response

• PayPal didn't immediately respond to a request for comment.

Preliminary Assessment by the Bundeskartellamt

• "According to the Bundeskartellamt’s preliminary assessment, this prohibition could restrict competition between various payment services and violate competition law," the cartel office said, referring to itself by its German name.

Reporting and Editorial Credits

(Reporting by Tom Sims, editing by Thomas Seythal)

Key Takeaways

  • The Bundeskartellamt initiated proceedings against PayPal in January 2023 over its 'no-surcharge' and 'presentation' clauses, which ban merchants from offering lower prices or highlighting alternative payment methods to PayPal users—measures seen as anti‑competitive under Article 102 TFEU and Sections 19 and 20 of Germany’s Competition Act (GWB) (addleshawgoddard.com).
  • These clauses may impair price competition by preventing merchants from reflecting lower costs of alternative payment services, making it harder for rivals to compete or enter the market, especially given PayPal’s dominant and relatively expensive position in Germany’s online‑payments sector (one.oecd.org).
  • The investigation aligns with broader efforts by the Bundeskartellamt to curb anti‑steering rules and platform dominance; similar actions include banning Amazon’s price‑control practices in 2026 and probing Temu’s influence over merchant pricing in 2025 (ca.marketscreener.com).

References

Frequently Asked Questions

What is the German Federal Cartel Office investigating about PayPal?
The Federal Cartel Office is examining whether PayPal's prohibition of extra merchant fees restricts competition and violates German law.
Why could PayPal's policy on merchant surcharges reduce competition?
The policy may prevent merchants from encouraging cheaper payment methods, harming competition among payment services.
Did PayPal respond to the antitrust authority’s statement?
PayPal did not immediately respond to requests for comment regarding the investigation.
What is the potential legal issue with PayPal's merchant fee rules in Germany?
According to the Federal Cartel Office, PayPal’s rules could violate German competition law by restricting market competition.

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