Point 2: In essence this says that it is incumbent upon eBay to clearly demonstrate the benefits.  Thus far, their half-truths and obfuscations have done nothing to show any true benefit.

The third point is simple the compliment of the second.  Those aggrieved by the activity must also demonstrate the lack of benefit.  It would seem that the sheer weight of comment in the media is making that very clear.

Point 4 states that, despite any contractual agreements between the parties, a declaration of “restraint of trade” will declare such agreements void.  In other words, any agreement between eBay and sellers which imposes the restriction of PayPal-only can be struck out.

The final point says that the determination of whether the contract is “restraint of trade” must be determined in the context of what was true when the contract was signed, not what the parties hoped might happen, or even what subsequently did happen.

Let’s put this into the specific context of the eBay ‘problem.’

eBay are seriously on the back foot over this.  And if they don’t acknowledge the restraint of trade problem, they don’t have a back foot at all!

In order to defeat the problem, they have to demonstrate one major thing.

They need to show that the public benefit of enforcing PayPal as the only payment mechanism significantly outweighs the impost upon the sellers and other (non-PayPal) financial providers (VISA, MasterCard, Paymate etc).  This also requires eBay to clearly demonstrate that PayPal does indeed offer the security benefits to justify exclusivity. 

It’s as simple as that.  If they fail, they will have some very interesting problems with the remaining terms of their agreements with the sellers.

At this point, all we need do is restate the AussieLegal quote, “A restraint of trade is any contractual term which seeks to restrict the freedom of a party to engage in business.” 

Dear eBay / PayPal: Good luck with your business model, you’re going to need it!