Germany’s Bundeskartellamt has told PayPal that its rules on surcharges may breach competition law. The regulator said the clauses may hinder rivals and restrict price competition. PayPal is among the most expensive online payment services in Germany, charging 2.49 to 2.99 percent plus 34 to 39 cents per transaction.
The Bundeskartellamt, Germany’s federal competition authority, opened proceedings against PayPal (Europe) on January 23, 2023. The case concerns two sets of terms in PayPal’s German user agreement: the “rules on surcharges” and the “presentation of PayPal”. The authority said it would examine how much market power PayPal holds and how far online merchants depend on offering it.
The clauses restrict what merchants can do at checkout. Under the rules, sellers that accept PayPal may not offer lower prices when a customer chooses a cheaper payment method. They are also barred from expressing a preference for other payment methods, or from making alternatives more convenient for customers. In effect, merchants cannot pass on the cost differences between payment methods.
The authority’s concern is that this prevents price competition. If merchants cannot steer customers towards cheaper options, other payment providers may struggle to win business on price or quality, and some may never reach the market. The Bundeskartellamt also argues that a dominant payment provider could gain more freedom to set its own prices.
The legal basis for the case includes the prohibition of abusing a dominant position under Article 102 of the Treaty on the Functioning of the European Union and Section 19 of Germany’s competition law. Section 20, which covers companies with market power, is also in play, and the authority has said an agreement-based restriction under Article 101 could also be relevant.
The stakes for consumers are clear to the authority. Merchants usually build payment costs into their product prices, so the fees that PayPal charges are paid ultimately by shoppers. Market studies cited by the authority describe PayPal as the leading online payment provider in Germany and one of the most expensive, with a standard fee of 2.49 to 2.99 percent of the payment amount plus 34 to 39 cents.
The case has now reached a more advanced stage. Mobiflip reported on November 11, 2026, that the Bundeskartellamt considers PayPal’s surcharge ban possibly anti-competitive and has communicated its concerns to the company. That step is preliminary, and the regulator has not yet reached a final decision.
PayPal’s response to the authority’s concerns has not been widely reported in the sources reviewed. The company could contest the findings, offer changes to its terms or accept commitments, and each route would have different implications for the case.
The next signals will be PayPal’s reply to the authority, any formal decision or commitments that follow, and whether other European regulators examine similar terms. Merchants and shoppers in Germany will be watching whether the ban on surcharges is changed.
