Does Paypal has too much ‘market power’? German federal cartel office opens proceedings.
The Bundeskartellamt’s proceedings are based on Article 102 TFEU and Section 19 GWB. According to these, there is an antitrust prohibition on the abuse of a dominant position or, according to Section 20 GWB, a position with market power. In addition, according to the Bundeskartellamt, a violation of the prohibition of agreements restricting competition pursuant to Article 101 TFEU and Section 1 GWB is possible. According to the Bundeskartellamt, it will examine what market power PayPal has. In addition, it is to be clarified to what extent sellers on online platforms are dependent on offering PayPal as a payment method.
Because if merchants are prevented from taking into account the different costs that arise from the choice of a payment method and passing them on to the end customer, it could become problematic. In that case, other payment methods can compete only with difficulty or not at all. As a result, the payment services with market power could charge even higher prices for their service.
In the end, it would be the consumers who would have to pay for this situation. After all, no merchant omits the costs for the payment method from his price calculation, even if, unlike shipping costs, they are not visible on the statement. If no cheaper payment service provider prevails or the prices are even increased, the costs for the payment option remain in the calculation of the seller. And these are simply borne by the buyer. Currently, the costs are between 2.49 and 2.99 per cent of the amount to be paid and an additional 34 to 39 cents per transaction. According to market studies, PayPal is one of the most expensive online payment services on the German market. It remains to be seen whether the Bundeskartellamt will ultimately allow other, cheaper payment service providers to assert themselves on the market.