Why ACCC cannot grant eBay Australia request for PayPal only payments

Stan Beer
Saturday, 19 April 2008 06:23

Opinion and Analysis

Most users with credit cards don’t bother to use clearing systems like PayPal when they buy online because it adds unnecessary complexity and added costs to the purchase (sellers must recoup their PayPal costs in the selling price). For the seller, restricting sales to PayPal account holders only could significantly narrow their market reach and lower their margins.

On the issue of fees and charges, it is easy to understand why eBay wants to force its users to buy and sell exclusively through PayPal. eBay, which already substantially increased its fees and charges in January this year, wants to do so again by stealth. Forcing users to conduct transactions by PayPal is a brazen attempt to double dip into users’ pockets.

The problem for eBay is that what it is attempting to do with PayPal in Australia resembles very closely what Microsoft has already been stung for in the EU – except Microsoft is arguably less culpable because the products it integrated into Windows were free and competition was still allowed! Integrating PayPal with eBay to the exclusion of other payment systems is akin to Windows users being forced to buy Windows Defender and prevented from using another security package. Needless to say, antitrust regulators would have something to say about that!

eBay is by far largest and most powerful online auction site and marketplace in the world. It has a dominant market position and many users from substantial merchants to home-based businesses to one-off consumers with a used bicycle to sell have come to rely on it to conduct transactions. Forcing eBay users to use PayPal exclusively is an unnecessary restriction of their trade.  Therefore the ACCC has no choice but to reject eBay’s request for immunity from prosecution under the Australian Trade Practices Act.