Respond

Summary

UK comptetition regulators have fined Paypal, the American payment company, for breaking rules pertaining to Paypal's $2.2 billion acquistion of iZettle, a recent Swedish start up. An investigation by the Competition and Markets Authority began after the acquisition was completed in September of 2018. These companies are the two largest suppliers of  mobile point-of-sale devices in the UK. It was then that the CMA halted the insertion of the business into the UK market and warned the deal could substantially decrease the competition of any market but specifically in the United Kingdom. It was recently reported that regulators fined the company 250,000 British pounds upon finding that Paypal had violated rules by cross-selling to customers based in the UK. Permission was granted to Paypal to market iZettle to customers in mainland Europe but not in the UK. Paypal claimed to have not deliberately broken rules and disagreed with the claims by the CMA while still recognizing the importance of the UK's merger control and enforcement orders. The CMA has growing concerns about problems from the rising power of digital technology companies in the UK; suggestions would be weighed such as new regulation for platforms of the ever growing Google and Facebook.

Tie-to-Class

It is important to understand the world of competition in marketing but also the regulation and its enforcement. While the mistakes made on Paypals behalf had only temporary effects, they were unintentional while marketing to France and Germany. To any degree, the mistakes were met with investigation by the CMA and penalization. As companies become larger and acquire other companies, they may have to gather further knowledge on the markets and regulations that those companies are saturated in and surrounded by, as they may intercept those customers as a result of their growth or purely by mistake.

Personal Take-away

I find that it is become ever increasingly common for issues like this to happen as mergers and acquisitions of larger companies continue. Modern companies must be aware of the rules in place to spread without causing harm to the markets or violating policies; with these types of problems comes newer policies and rules, and regulators that require further knowledge to abide and operate by.