Following the appeal of last year’s dispute between Wettbewerbszentrale and Flixmobility, Munich’s Higher Regional Court allows surcharging when paying via PayPal and Sofortüberweisung.
In December 2018, the Regional Court I of Munich (LG Munich I) surprisingly decided in favour of the German association to combat unfair competition (Wettbewerbszentrale) in a dispute against Flixmobility (operator of long-distance bus lines Flixbus) regarding surcharging when using PayPal. Flixmobility appealed the decision and subsequently won the dispute in front of the Higher Regional Court of Munich (OLG Munich). The dispute will now probably move on to Germany’s Federal Court of Justice, the country’s highest civil court.
Surcharging adds a fee to a purchase price when using specified means of payment. For “common” means of payment as SEPA direct debit, SEPA credit transfer and most payment cards, section 270a of the German Civil Code (Bürgerlichegesetzbuch – BGB) as part of the implementation of the second Payment Services Directive (PSD2) prohibits surcharging in Germany. In the case of PayPal (as well as other Payment Service Providers such as Sofortüberweisung) the norm’s application is disputed. As the list of covered payment schemes seems exhaustive, its boundaries were tested by the decision of the regional court.
The written reasons for higher regional court’s judgement are expected in due time. It is likely to pay tribute to the technical details and specific characteristics of payment schemes with more clarity than previously done by the lower court. PayPal may very well be regarded as a “common” means of payment. Its users exceed 21 million in Germany. This is, however, only a colloquial term to describe the scope of the relevant section 270a BGB. Detrimental for the law’s application is if and how the payment is processed and payers bank account is accessed. “PayPal only transfers e-money”, the judges of the 29th Senate of OLG Munich are quoted. E-money transactions do not fall within the scope of section 270a BGB, not even (as in the most common case for PayPal) when an e-money account is charged with fiat money using one of the payment methods above.
In its oral reasoning, OLG Munich referenced the legislators intention and thus to the decision recommendation of the Finance Committee of the German Bundestag which explicitly excludes PayPal from section 270a BGB. On the basis of legislative intention, OLG Munich also negated the application of section 270a BGB with regard to Sofortüberweisung.
Upon request of the Wettbewerbszentrale, the court allowed for the revision of the by Germany’s Federal Court of Justice. A revision, unlike an appeal, is no retrial of the case. The Federal Court of Justice checks the coherent application of the applied law to either confirm the judgement or return it to OLG Munich for a retrial. Wettbewerbszentrale has not yet announced if it intends to ask for a revision. This is, however, to be expected.