PayPal action from ACCC to be watched globally

Stan Beer
Thursday, 17 April 2008 04:05

Opinion and Analysis

The Australian office of eBay has written to the ACCC, through its law firm Deacons, with a request for immunity from the Trade Practices Act over the PayPal action. This fact alone indicates that eBay believes it could have a legal problem.
The ACCC, which has often been described as a toothless tiger because of perceived failures to regulate effectively in areas such as telecommunications and petrol pricing, has now found itself thrust into the global limelight. There is no doubt that its ruling on what eBay Australia is attempting to with PayPal will be watched keenly in other markets around the world.

If the ACCC does in fact grant eBay Australia the right to demand exclusive use of its PayPal system, it will have bought into eBay's argument that eliminating competition is over-ridden by its contentious claim that Paypal offers greater buyer protection. This could set a precedent and open the floodgates for eBay in other markets around the world, including the US and EU.

On the other hand, if the ACCC stands firm on its purported longstanding commitment to fostering fair and open competition in the marketplace and shuts down the eBay Australia PayPal push, the decision will go a long way to scotching further eBay moves in this regard elsewhere in the world.

Australia, because of its relative isolation and highly developed economy, has long been regarded as a test market for US and other multinational companies. The action of eBay Australia with PayPal is one test case that will be watched particularly closely.