As reported by the Financial Times on Friday (Sept. 21), the United Kingdom’s competition watchdog, the Competition and Markets Authority said, in what is known as an initial enforcement order, that it will examine whether the merger between U.S.-based PayPal and Sweden’s iZettle has a detrimental impact on competition in the U.K.
As has been widely reported, the $2.2 billion deal between the two companies was consummated Thursday and had been announced in May.
FT noted that initial enforcement orders are “issued regularly” by the CMA. The orders themselves are not direct lead-ins to a formal investigation but it is likely that there will be an embrace of at least the first stage of the merger review. There is no timetable for the initial review of the merger.
The initial review comes after the U.K. said it hired Harvard professor Jason Furman to conduct what is being billed as a “digital competition inquiry,” charged with examining competition in the tech industry.
Though the investigation may not be formal at the time of this writing, the order that was issued Thursday stipulates that PayPal and iZettle must “freeze” any additional corporate activity that leads to more integration between the two firms or “otherwise impair” PayPal and iZettle from being able to act independently from one another.
PayPal said that it is “working cooperatively with the CMA as it conducts its review. PayPal and iZettle brands and operations will be held separate as agreed with the CMA, pending completion of the CMA’s review.”
As noted in this space yesterday, upon the closing of the deal, PayPal said the transaction will help the firm build on a portfolio of products and services geared toward small businesses. In terms of the executive team, Jacob de Geer, co-founder and CEO of iZettle, will continue to lead the firm.