Germany’s Federal Cartel Office has raised concerns that PayPal’s prohibition on online merchants charging customers additional fees for using its payment service could restrict competition and potentially violate the law. The authority said the practice may limit consumers’ freedom to choose alternative payment methods and weaken competition in the online payments market.
The regulator noted that PayPal, one of the most widely used online payment methods in Germany, charges merchants above-average fees compared with competing payment services while maintaining a significant market share. According to the authority, preventing merchants from passing these additional costs on to customers reduces the incentive for consumers to use alternative payment options, potentially allowing PayPal to maintain higher merchant fees without sufficient competitive pressure.
The Federal Cartel Office, which launched an investigation into PayPal in 2023, is also examining whether the company may be required to surrender profits gained through the practice. PayPal said it disagreed with the authority’s preliminary findings but would continue to cooperate constructively with the proceedings. The company has now been given an opportunity to respond before the regulator reaches a final decision.
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