UK’s competition watchdog fines PayPal over the acquisition of iZettle
Category: #headlines  By Pranali Mehta  Date: 2019-09-26
  • share
  • Twitter
  • Facebook
  • LinkedIn
UK’s competition watchdog fines PayPal over the acquisition of iZettle

In the United Kingdom, CMA (Competition and Markets Authority) is a unit of the non-ministerial government department (NMGD) that is responsible for strengthening business competition and reducing and preventing anti-competitive activities.

The agency was seen in action recently when it reportedly fined online payment giant PayPal Holdings Inc. with $311,000 fine over its $2.2 billion acquisition of Swedish firm iZettle. For the uninitiated, iZettle offers point-of-service hardware and plug-in card readers that enables small businesses to take credit card payments.

In May 2018, the American payment giant acquired the business of iZettle. However, Competition and Markets Authority that year issued an Initial Enforcement Orders (IEO) and ordered PayPal to keep its business separate from iZettle in the UK during the investigation period. Nevertheless, CMA allowed PayPal to integrate two business outside the UK without influencing UK customers. 

According to the Competition and Markets Authority (CMA), PayPal had breached the terms and conditions of initial enforcement order which were issued last Sept. It fined PayPal saying that, despite its assurance, PayPal conducted cross-selling pilot campaigns that intended to target customers in Germany and France which eventually leads in contacting UK potential customers.

Previously, CMA gave green light to this acquisition in June but is still fining PayPal for breaching its order. According to the regulator, a £250,000 fine is a proportionate amount of penalty, given to the severity of the breach. This fine is considerably less than maximum penalty which is of 5% of PayPal's turnover.

In response to the allegations, a spokesperson from PayPal said that the company respectfully disagrees with CMA’s report, however, understand the importance of IEOs in UK’s merger control regime. The CMA has acknowledged that the alleged infractions that led to this fine were not intentional and had no impact in practice.

The spokesperson added that, while the company is disappointed with this outcome, it takes compliance seriously and has learned a lot from this process.

Source Credit - https://www.businessinsider.in/PayPal-was-just-fined-311000-by-a-UK-regulator-over-its-2-2-billion-iZettle-acquisition/articleshow/71276279.cms

  • share
  • Twitter
  • Facebook
  • LinkedIn

About Author

Pranali Mehta

Pranali Mehta    

Pranali Mehta boasts of over three years of experience as a content writer. Having completed her graduation in chemical engineering, she worked as safety & environment associate in a chemical company for a year. Harnessing her passion for writing however, Pranali deci...

Read More >>

More News By Pranali Mehta

Tesla CEO Elon Musk starts first Semi truck deliveries in Sparks, Nevada
Tesla CEO Elon Musk starts first Semi truck deliveries in Sparks, Nevada
By Pranali Mehta

Elon Musk, Tesla's CEO, has recently kicked off the delivery of its first few production Semi trucks developed at its factory in Sparks, Nevada, while talking with Dan Priestly, Senior Manager, Semi truck engineering Tesla. Musk and Tesla did not...

RedBrick AI backed by Sequoia India & Surge in $4.6 million funding
RedBrick AI backed by Sequoia India & Surge in $4.6 million funding
By Pranali Mehta

RedBrick AI, the health-tech startup has reportedly raised $4.6 million in a funding round, which was led by Sequoia India and Southeast Asia’s Surge. According to reports, this fund will be used to expand the market for RedBrick’s medica...

UK increases borrowing as energy support starts and economy declines
UK increases borrowing as energy support starts and economy declines
By Pranali Mehta

The UK has reportedly increased its borrowings as government assistance with energy costs and the effects of a weak economy led to an increase in the UK public debt last month to the fourth highest level for an October on record. Office for Nation...