'Far From Consumer Friendly' - PayPal Slammed In Class-Action Suit Accused Of Forcing Higher Price

PayPal Holdings, Inc. PYPL is facing a consumer antitrust lawsuit in a federal court in San Jose, California, accused of engaging in anticompetitive practices. 

PayPal charges merchants the highest transaction fees in the industry (more than 3.5% per eCommerce transaction), according to the lawsuit.

"If consumers were allowed to see behind PayPal's pricing veil, they would see a clear and distinct difference between using PayPal and Venmo to complete their transactions and using its competitors," said Steve Berman, managing partner, and co-founder of Hagens Berman, the law enterprise representing the suers. "For a service named for its friendliness, PayPal is far from consumer friendly."

Also Read: PayPal Files Patent Application, Looks To Integrate Payment Solutions With NFTs

As per the lawsuit, PayPal uses "anti-steering" rules to subdue competition from lower-cost platforms.

Attorneys said PayPal's policies are illegally anticompetitive and led to consumers paying higher prices for e-commerce transactions. Merchants also cannot tell customers that other payment methods are more cost-effective or preferred, according to the complaint.

In the case of PayPal, which owns Venmo, the plaintiffs allege that the company strictly prohibits offering price discounts when consumers use non-PayPal means of payment. 

"PayPal continues to put our customers first in everything that we do, and we take this responsibility seriously," the company told Reuters in a statement.

Price Action: PYPL shares are trading lower by 0.90% to $56.96 premarket on the last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: EquitiesNewsLegalMarketsMediaGeneralAI GeneratedBriefs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!