As reported by the Financial Times, the United Kingdom’s competition watchdog, the Competition and Markets Authority (CMA), stated, in what is known as an initial enforcement order, that it will examine whether the merger between US-based PayPal and Sweden’s iZettle has a detrimental impact on competition in the UK
As has been widely reported, the US$2.2 billion deal between the two companies was consummated Thursday, September 21, and had been announced in May.
The 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 came after the CMA stated 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 stipulated 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 announced 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.”
Upon the closing of the deal, PayPal stated 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.
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