ACCC kills eBay's PayPal only plan

Stan Beer
Thursday, 12 June 2008 16:19

Business IT - Technology

The Australian Competition and Consumer Commission (ACCC) has effectively quashed eBay Australia's attempt to corner the local auction and online transactions markets by enforcing a PayPal only policy on the Australian eBay site. While the battle is not necessarily completely over, a huge blow has been dealt to eBay's Australian ambitions.

eBay International AG had lodged a notification on April 11 seeking immunity from prosecution under the anti-competition provisions of the Australian Trade Practices Act.

The global eBay community had been watching with fascination to see how the Australian office of the world's dominant online auction site would fare with its brazen move. eBay, which had boldly proclaimed that it was going ahead with its plans on its official blog, found itself forced onto the backfoot from many fronts.

Not only were the smaller local competitors raising hell against the eBay move, but eBay also found itself confronted by Australia's big end of town, including the Australian Bankers Association and the Reserve Bank of Australia. Then Sensis, the directories arm of dominant telco Telstra, announced that it was launching a rival auction site by extending its popular Trading Post classified ads site.

eBay was also getting heat about its Australian venture from abroad, especially in the US, where local traders feared that the Australian move, if successful, would set a precedent and open the floodgates for eBay sites elsewhere. Under pressure from the US media, eBay was forced to publicly state that it would not seek to enforce a PayPal only policy in the US, admitting that it could not do so for legal reasons.

For many, this signalled the beginning of the end for eBay's PayPal only plans in Australia.

The ACCC has stated in no uncertain terms that the eBay move would be a threat to competition in Australia. Please read on to page 2