Despite backdown, is eBay still flouting Australian law with PayPal?

by Alex Zaharov-Reutt

Friday, 04 July 2008

Page 2 of 4 In an official ACCC notice entitled “ACCC proposes to revoke immunity for eBay's PayPal only policy”, there appears to be no acceptance by the ACCC of eBay’s stage 1 plan. Parts of the ACCC notice (linked above) state: “The Australian Competition and Consumer Commission has issued a draft notice proposing to revoke a notification lodged by eBay International A.G. on 11 April 2008. Under the notification, eBay proposes to mandate the use of PayPal for almost all transactions on the eBay site.” ACCC Chairman Graeme Samuel is then quoted as saying: "The ACCC is concerned that the notified conduct will allow eBay to use its market power in the supply of online marketplaces to substantially lessen competition in the market in which PayPal operates. "The ACCC acknowledges that having PayPal as the only payment provider has the potential to deliver some benefits to users, such as increased buyer protection insurance in certain circumstances. However, the ACCC believes that consumers are in the best position to decide which payment method is most suitable for them. "The notified conduct denies them that choice. Accordingly, the ACCC considers that these benefits do not outweigh the anti-competitive effects of the conduct," Mr Samuel said. It would appear that the ACCC’s statement noting that “the ACCC believes that consumers are in the best position to decide which payment method is most suitable to them” could equally apply as easily to sellers as it does to buyers. The ACCC notice does say that the ACCC has asked eBay to “delay implementation of the second stage of the conduct until a final decision is made by the ACCC”, but at no point does the notice indicate ACCC acceptance of stage 1 of the conduct. And therein lies the confusion. Has the ACCC agreed to stage 1 of eBay’s request, and if so, why? In addition, eBay has very tightly integrated PayPal within the eBay website, making the PayPal logo very large, which in itself suggests that PayPal is the preferred method of payment whether the seller wishes this to be the case or not. This therefore makes it difficult for alternate payment methods to receive the same visual identification as the enlarged PayPal logo, while also serving to reduce the chance that alternate payment methods will be chosen. An iTWire reader has been following the case and has sent us a copy of a letter he has sent to the ACCC since eBay’s announcement of the withdrawal of its plans, and after reading media comments, in particular those quoted at “The Sheet”, in which eBay Australia CEO Simon Smith appears to be claiming the ACCC’s blessing. Most of the letter is reproduced on page 3 with permission and makes for very interesting reading. Please continue. << First page <   1 2 3 4 Next page > Last page - Post your comment >>

 

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