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Germany's Federal Cartel Office has voiced concerns about PayPal's merchant rules on November 11, 2026. The regulator thinks these rules may limit competition among online payment services. The regulator believes the rules may violate German competition law. The case centers on a rule that bars online sellers from adding extra charges for PayPal payments.
The authority says this policy makes life harder for cheaper payment services trying to compete in Germany. PayPal holds a strong place in the country's online payment market. It also charges merchants higher fees than several rivals. The regulator feels these rules may stop shoppers from picking cheaper options.
The investigation into PayPal's business practices began in January 2023. The regulator now argues that merchants cannot ask customers to pay more for choosing PayPal at checkout. As a result, shoppers may see PayPal as just as affordable as other payment methods, even when it costs sellers more to process transactions.
The regulator explained that shoppers have little reason to try other services under these conditions. It said, 'As long as PayPal has to be offered without extra charge, consumers have fewer incentives for using another payment method.' The authority believes this setup eases the pressure on PayPal to cut merchant fees.
PayPal has rejected the early findings and defended its stand. The company said it would 'continue to engage constructively in the proceedings.' The authority has given PayPal a chance to respond before it reaches a final decision.
The German body is also checking whether PayPal should return profits earned through this practice. Such a step could bring financial consequences for the company if a legal violation is established.
The case remains at the preliminary stage, and no final ruling has been issued against PayPal. The outcome could shape how payment providers set merchant fees across Germany's online shopping market.
The probe also raises questions about payment choices at online checkouts. Any future changes could give merchants more freedom to promote cheaper methods and manage transaction costs.
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