Regulation

PayPal’s iZettle Acquisition Draws Fine From UK Regulator

PayPal’s iZettle Acquisition Draws Fine In UK

The Competition and Markets Authority (CMA) in the U.K. has levied a fine against PayPal for breaking rules regarding marketing in the country when it acquired iZettle for $2.2 billion, according to a report by the Financial Times.

The deal, which brought together the U.K.’s two biggest mobile POS device suppliers, was completed in September of last year, but triggered an inquiry by the regulator because of the size of both companies and the implications of the merger.

The CMA ordered the two businesses to stop doing business during the inquiry, and said that if the deal was completed, there could be a “substantial lessening of competition in any market or markets in the United Kingdom.” A month later, the CMA kicked off a more formal investigation.

The regulator said on Tuesday (Sept. 24) that PayPal cross-sold to customers in the U.K. and will face a fine of £250,000.

PayPal had permission to market to customers in mainland Europe, but was not permitted to do so in the U.K. In addition to launching a marketing campaign in Germany in France, PayPal also reached out to U.K. customers.

The CMA said that for PayPal, there was “no reasonable excuse for its failure to comply.”

PayPal said it was disappointed with the decision, and claimed  it did not intentionally break the rules.

“The CMA has confirmed that the alleged infractions that led to this fine were not intentional and did not have any impact in practice and they were remediated as soon as the CMA raised concerns,” PayPal said. “While we respectfully disagree with the CMA’s conclusions, we understand the importance of initial enforcement orders in the U.K.’s merger control regime and treated compliance with the IEO with the utmost importance throughout the merger review.”

PayPal said it would accept the fine and does not plan to appeal.

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