PayPal action from ACCC to be watched globally

By Stan Beer
Thursday, 17 April 2008 04:05

Opinion and Analysis

When auction site eBay Australia announced last week that it would only accept online payments through its PayPal system from June 17 it set the global blogosphere alight - for all the wrong reasons. Global eBay users, both sellers and buyers, worried that Australia is just a test market for a worldwide rollout, are thus watching keenly as regulator the Australian Competition and Consumer Commission (ACCC) examines the eBay action.

The problem for eBay is twofold.

First, as indicated in the Sydney Morning Herald report , there is a strong likelihood that the eBay action breaches the Australian Trade Practices Act and the ACCC plans to invite public submissions from interested parties on its website. From all accounts, the responses are not likely to be pretty.

Second, both eBay and its PayPal subsidiary are already suffering from a deteriorating image problem among both sellers and buyers.

There is a substantial website with attached forums, called PayPal Sucks , aka No PayPal, which is devoted to: "expose the nightmare of doing business the paypal way."

eBay sellers are up in arms over changes to both charges and terms and conditions that came into force on January 29. There has already been one global sellers' boycott of eBay in February and another boycott is planned for May 1. A long list of grievances in an email circulated by a sellers' group which labels itself "Death of eBay" includes changes to the PayPal system such as holding sellers' payments for 21 days.

The same email also mentions the PayPal move in Australia: "As of May 1st we again shall boycott eBay in an attempt to be heard as there have been more policy changes since Jan. 29th. Australia’s eBay is now making it mandatory for all user’s to only use Paypal (which is owned by eBay)."

The big question is whether forcing eBay buyers to use PayPal exclusively is a breach of the Australia Trade Practices Act. eBay Australia itself has already answered that question. CONTINUED page 2