PARTIV Note13—CommitmentsandContingencies PayPalHoldings,Inc. NotestoConsolidatedFinancialStatements—(Continued) Germany prohibiting surcharging and requiring parity presentation of PayPal relative to other payment methods. We are cooperatingwiththeFCOinconnectionwiththisproceeding. LegalProceedings OnAugust20,2021,aputativesecuritiesclassactioncaptionedKangv.PayPalHoldings,Inc.,etal.,CaseNo.21-cv-06468, was filed in the U.S. District Court for the Northern District of California (the “Kang Securities Action”). The Kang Securities Action asserts claims relating to our disclosure of the CFPB PayPal Credit Matter and the SEC Debit Card Program Matter in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021. The Kang Securities Action purports to be brought on behalf of purchasers of the Companys stock between February 9, 2017 and July 28, 2021 (the “Class Period”), andassertsclaimsforviolationsof Sections10(b) and 20(a) of the SecuritiesExchangeAct of 1934 againstthe Company,its Chief Executive Officer, and former Chief Financial Officer. The complaint alleges that certain public statements made by the Company during the Class Period were rendered materially false and misleading (which, allegedly, caused the Companys stock to trade at artificially inflated prices) by the defendants failure to disclose that, among other things, PayPals business practices with respect to PayPal Credit and regarding interchangerates paid to its bank partner related to its bank-issued co-branded debit cards were non-compliant with applicable laws and/or regulations. The Kang Securities Action seeks unspecified compensatory damages on behalf of the putative class members. On November 2, 2021, the court appointed a Lead Plaintiff, and on January 25, 2022, the Lead Plaintiff filed an amended complaint. The amended complaint alleges a class period between April 27, 2016 and July 28, 2021 (the “Amended Class Period”), and in addition to the Company, its Chief Executive Officer, and former Chief Financial Officer, also names other Company executives as defendants. The amended complaint alleges that various statements made by the defendants during the Amended Class Period were rendered materially false and misleading, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by PayPals alleged violations of the 2015 consent order with the CFPB, federal consumer financial laws, and Regulation II. On August 8, 2022, the court granted Defendants motion to dismiss the amended complaint in its entirety, and granted Lead Plaintiffs request for leave to file a further amended complaint. On September 16, 2022, Lead Plaintiff filed a Second Amended Complaint (the “SAC”), which asserts the same claims against the same Defendants based on the same alleged conduct as the prior complaint. Defendants moved to dismiss the SAC on November 3, 2022, andbriefingis ongoing. OnDecember16,2021andJanuary19, 2022, two related putative shareholder derivative actions captioned Pang v. Daniel Schulman,etal., Case No. 21-cv-09720, and Lalor v. Daniel Schulman, et al., Case No. 22-cv-00370, respectively,were filed in the U.S. District Court for the Northern District of California (the “California Derivative Actions”), purportedly on behalf of the Company. On August 2, 2022, a related putative shareholder derivative action captioned Jefferson v. Daniel Schulman, et al., No. 2022-0684, was filed in the Court of Chancery for the State of Delaware (the “Delaware Derivative Action,” and collectively with the California Derivative Actions, the “Derivative Actions”), purportedly on behalf of the Company. The Derivative Actions are based on the same alleged facts and circumstancesas the Kang SecuritiesAction, and name certain of our officers, including our Chief Executive Officer and former Chief Financial Officer, and members of our Board of Directors, as defendants. The Derivative Actions allege claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement,waste of corporate assets, and violations of the Securities Exchange Act of 1934, and seek to recover damages on behalf of the Company. On February 1, 2022, the court entered an order consolidating the two California Derivative Actions and staying them until all motions to dismiss in the Kang Securities Action are resolved. OnOctober 4, 2022, a putative securities class action captioned Defined Benefit Plan of the Mid-Jersey Trucking Industry andTeamstersLocal701PensionandAnnuityFundv.PayPalHoldings,Inc.,etal.,CaseNo.22-cv-5864,wasfiledintheU.S. District Court for the District of New Jersey. On January 11, 2023, the Court appointed Caisse de dépôt et placement du Québec as lead plaintiff and renamed the action In re PayPal Holdings, Inc. Securities Litigation (“PPH Securities Action”). ThePPHSecuritiesAction assertsclaims relating to our public statements with respect to net new active accounts (“NNA”) results and guidance, and the detection of illegitimately created accounts. The PPH Securities Action purports to be brought on behalf of purchasers of the Companys stock between February 3, 2021 and February 1, 2022 (the “Class Period”), and asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against the Company, its Chief Executive Officer, and former Chief Financial Officer. The complaint alleges that certain public statements made by the Company during the Class Period were rendered materially false and misleading (which, allegedly, caused the Companys stock to trade at artificially inflated prices) by the defendants failure to disclose that, amongother things, the Companys incentive campaigns were susceptible to fraud and led to the creation of illegitimate accounts,whichallegedlyaffectedtheCompanysNNAresultsandguidance.ThePPHSecuritiesActionseeksunspecified compensatorydamagesonbehalfoftheputativeclassmembers. 106 •2022AnnualReport