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?