eBay responds to ACCC re PayPal only policy

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eBay has made a response to the ACCC (Opens in PDF), regarding their move to compulsory PayPal for eBay Australia transactions. The response makes three main points

1) PayPal only on eBay will not significantly reduce competition in online payments as payments on eBay do not comprise a significant proportion of all online payments and PayPal’s membership base will not increase significantly by making it complusory on eBay. They point out that “eBay buyers and sellers who do not wish to pay PayPal fees are able to avoid doing so by listing and purchasing items through competing services”. An additional point is that buyers still have choice of which underlying payment method to use such as bank transfer, debit card, credit card or PayPal balance.

They quote Oztion’s report that their membership has risen 22% since the PayPal announcement, saying “there is evidence to suggest that a number of sellers will choose alternative sales platforms in response to the implementation of the Project, providing a strong incentive for eBay to maintain a competitive offering”.

2) eBay state that use of PayPal will actually increase protection to users. They say “PayPal users automatically obtain the benefits of the security and protection mechanisms offered through those [credit/debit card, Bank funded] payment methods plus the additional layer of security and protection benefits offered by PayPal.”

eBay also highlight that even their main competitors acknowledge “that the information-sharing between eBay and PayPal gives PayPal an advantage in reversing fraudulent transacfions..” as justification for insisiting on PayPal only.

(3) eBay reject a number of claims made in submissions, such as PayPal is not the largest and longest established online payment provider, PayPal will not become a monopoly for eBay payments, it will merely be an intermediary to process transactions made via other payment institutions, and that they don’t discriminate against high-volume and/or low-margin sellers as they offer micropayments and volume discounts.

eBay’s submission suggests that PayPal will not become an online payment monopoly, and that buyers and sellers have choices of venues to buy and sell on. They insist that payments via PayPal not only offer additional security to alternatives, but enable eBay to protect buyers and sellers from problematic transactions through monitoring buyer and seller behaviour.

In conclusion eBay said changes would not be substantially lessening competition, and in any event, any lessening of competition would be clearly outweighed by the significant public benefits that would be likely to result from it.

The big question is will the ACCC grant eBay’s request to go PayPal only, and if so how long will it be before the policy migrates to other countries around the eBay world?

9 Responses

  1. I think the ACCC will allow this change to happen and approval will increase the odds that PayPal will be compulsory on all eBay marketplaces.

    I love this quote: “eBay buyers and sellers who do not wish to pay PayPal fees are able to avoid doing so by listing and purchasing items through competing services”. or basically “bugger off” (can I say that?)

  2. I love this bit…

    “PayPal will not become a monopoly for eBay payments”

    Yep. You cant become what you are already. 10/10 for double speak.

  3. Give Us ALL a break ebay!!!

    You say that Ebay with “Paypal Only” would not be a monopoly because other sites don’t have monopolies??? That makes NO SENSE whatsoever!!!

    DOWN with Ebay’s DICTATORSHIP!!!

    MANY are BOYCOTTING EBAY with their GLOBAL FRIENDS!!!

  4. Wow, what an amazing load of crap. I wonder if anyone at eBay really believes that or whether they were struggling to keep a straight face the whole time.

  5. Randy Smythe,
    On what do you base your belief that the ACCC will approve this conduct?

    From this side of the Pacific, I don’t think it will be approved, but I think that PayPal will have picked up a much greater market share while the decision is made.

    Kind Regards, Kevin in Australia

  6. I agree with Kevin, given the extraordinary response to ACCC request for submissions, all negative I think it will be denied. The final submission just posted blows them out of the water.

    So far as gaining market share this will be nominal, just like eBay’s user numbers. Sellers are being forced to sign up but they will not use it.

    Look for lawyers with raw bleeding scalps on the streets of Sydney. They all pulled their hair out in clumps trying to make pretty silk purses out of eBay’s sows ear.

  7. As I understand it, in order for the ACCC to allow this, there has to be extremely convincing public benefit to be obtained from it. I don’t think eBay have made that case. Their entire argument with regard to the public seems to be “Consumers are stupid and don’t know what’s good for them, so we have to decide for them”.

    There are also good arguments that the competing sites, while growing, are only a teeny tiny slice of the Australian online market, and eBay’s “Well, bugger off if you don’t like it!” argument doesn’t hold a lot of water, especially when compared to a number of other highly professional, legally-based arguments submitted to the ACCC against allowing this.

    Also, if I understand the situation correctly, eBay is actually arguing to be granted an exemption from Australian law. I don’t believe they’re necessarily arguing that they are not in violation of it, but rather that they should be given special permission to flout it. (Possibly I have that wrong; I’m not an expert in Australian commerce law.) If this is the case, then I’d say for certain they haven’t made their case.

  8. The reason i see that ebay is doing this as they own paypal is they want world domination on the world online auction system so they can push their share prices higher,get richer quicker.getting rid of peoples freedom of choice is just a sleazy backdoor way to get rid of any competition so they can have their cake and eat it as well the real truth as we all know is greed inspired.

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