PayPal unconcerned over anti-competitive claims
When online payments giant PayPal closed its acquisition of iZettle, it made the biggest purchase in its history. Now, regulators in the UK say that might have been a mistake. Britain’s antitrust watchdog, the Competition and Markets Authority (CMA) says that PayPal might “face insufficient competition in the UK after acquiring its market-leading rival.” On Tuesday, the company’s cehif operating officer said it was “engaging positively” with the CMA, and investors had nothing to worry about.
PayPal’s share price has appreciated by 15% year to date
Source: Yahoo Finance
The CMA raised concerns that PayPal’s $2.2 billion acquisition of iZettle, a European fintech start-up based in Sweden, could lead to higher prices for online payments services and less competition. At the Slush Technology conference in Helsinki this week, PayPal’s chief operating officer Bill Ready spoke directly to those concerns.
He said: “We absolutely believe that we will demonstrate that we are bringing more choice (and that) we are pro-competition. We are really looking to expand the market in ways that are great for small business and great for consumers alike.” He added that the company was working with the CMA to address its complaint.
And here is that complaint. In a statement, Andrea Gomes da Silva, the regulator’s executive director, said: “While iZettle is a relatively recent entrant to payment services, it has already established a market-leading position in mobile point of sale devices and was well-placed to compete against PayPal in other emerging markets. That’s why we are concerned that PayPal’s takeover could lead to higher prices or reduce the quality of the services available to customers.”
As the story continues to play out, we’ll keep you updated.
Dominion holds PayPal in its Global Trends Ecommerce Fund.
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