Australia Blocks eBay's PayPal-Only Bid

'Consumers are in the best position to decide.'

by staff writer
- Jun 13, 2008

Australia's commerce regulator has told eBay to table a plan that would limit transactions within its online marketplace to cash-on-pickup or PayPal, which eBay owns.

In response, eBay announced it would delay implementation of its new payment policy until July 15. The PayPal-only policy was originally set to take effect June 17.

In a draft notice issued June 12, proposing to revoke eBay's request for immunity from Australia's fair trade practices law, the Australian Competition and Consumer Commission (ACCC) said it was concerned that, in practice, the policy would give eBay too much power and stifle competition in the online payment marketplace.

ACCC chairman Graeme Samuel acknowledged that having PayPal as the only payment provider could be beneficial to buyers in certain cases but said the benefits of increased buyer protections would not outweigh the anti-competitive effects.

"[The] ACCC believes that consumers are in the best position to decide which payment method is most suitable for them," he said. "The notified conduct denies them that choice."

Starting on May 21, 2008, eBay began requiring Australian sellers to offer PayPal as one of their accepted payment methods. That aspect of the payment policy remains in effect. Responding to the ACCC notice, eBay said it will still provide up to $20,000 in PayPal Buyer Protection starting June 17, as originally planned.

In a statement on eBay Australia's general announcement board, a message attributed to "the eBay team" said that eBay "is disappointed that the ACCC's current view delays the opportunity to provide consumers a more secure way to shop on with confidence.

"eBay intends to work with the ACCC and hopes to achieve a final outcome which has the safety and security of eBay's members as its paramount objective. eBay will delay the removal of other payment methods from the site until Tuesday 15 July," the statement read.

The ACCC said it will consider further submissions from eBay and other interested parties in response to the draft notice before issuing a final decision.

Read the full ACCC draft notice here.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

Other Entries by this Author

Follow Us