The UK’s competition watchdog plans to launch an in-depth investigation into PayPal’s takeover of iZettle amid fears it could drive up prices for customers.
The Competition and Markets Authority (CMA) said it is concerned the deal could negatively impact future competition for mobile payment services, which it said could result in higher prices or lower quality service for customers.
The CMA had carried out an initial investigation and asked Paypal to offer proposals to address the concerns.
But today the watchdog said Paypal had failed to resolve its concerns and it will refer the deal for an in-depth probe by an independent group of CMA panel members.
A Paypal spokesperson said: “Paypal is working cooperatively with the CMA and is committed to demonstrating to the panel of experts that the market is, and will remain, competitive.”
The CMA announced its intention to investigate Paypal’s $2.2bn merger with the Swedish payments startup on the day the deal completed in September.
Paypal swooped in on iZettle, which provides mobile payment services to small businesses, just three weeks after the startup revealed plans for an IPO.
The two companies will remain separate while the CMA undertakes its investigation.
If the deal goes ahead, iZettle’s co-founder Jacob de Geer will continue to lead the firm, reporting to Paypal chief operating officer Bill Ready.