The UK Financial Conduct Authority (FCA) has revealed an investigation into US-based tech and payment firms PayPal (NASDAQ:PYPL), Visa NYSE:V(), and Mastercard (NYSE:MA). The investigation has been launched due to allegations of anti-competitive behavior under the Competition Act of 1998. More specifically, it concerns the funding and use of PayPal’s digital wallet.
The decision to investigate the aforementioned firms follows PayPal’s 10Q filed at the end of March. PayPal revealed the FCA investigation at that time and indicated they were cooperating with the regulator.
The FCA stated that it has yet to reach a conclusion on the review regarding whether competition laws have been transgressed.
The UK Competition Act prohibits agreements, practices, and conduct that may damage competition in the UK, which is statutorily protected. The FCA uniquely is required to enable competition within its remit. Cases may also be brought forward by the UK Competition and Markets Authority.
The FCA said it is currently gathering evidence, and it may proceed to issue a statement of objections setting out its provisional view that there has been an infringement of the law.
Not all cases result in the FCA issuing a statement of objections.
If a statement of objections is issued, the targeted parties may respond with a written and an oral presentation prior to any decision if the law has been broken.
PayPal works with both Visa and Mastercard in the UK, but the arrangement is not unique to the jurisdiction.
