Mayday! eBay raises white flag over forced PayPal in US

Stan Beer
Tuesday, 13 May 2008 07:02

Opinion and Analysis

Apparently being uniquely local in Australia for eBay is attempting to gain a monopoly by using market dominance to eliminate competition. Unfortunately for eBay, however, it now has more to worry about than phlegmatic regulator, the Australian Competition and Consumer Commission (ACCC) and a few small local competitors. No less than the Reserve Bank of Australia and the Australian Bankers Association have come out publicly against the eBay Australia move in submissions to the ACCC.

Both the small online payments competitors and the large banks are concerned that eBay will by stealth convert a large proportion of its 5 million Australian users to PayPal. This in turn could go a long way to eliminating alternative payments systems on sites other than eBay.

With such powerful forces aligned against eBay Australia, the ACCC may have no choice but to issue a competition notice designed to block the PayPal-only move under the anti-competitive provisions of the Australian Trade Practices Act.

If eBay is forced to back down in Australia over its attempt to enforce PayPal-only transactions, it will be a serious loss of face for the company, which is already facing revolts from its users over fee hikes worldwide. In that case, the "e" in eBay may well be interpreted as shorthand for egg-on-face.