eBay Abandons Plan To Make Aussies Use PayPal
By Anna Johnson on July 14th, 2008After announcing in April that it would require Australian based eBay sellers to, firstly, provide its PayPal online payment service as an option, and, secondly, to require either PayPal or cash to complete transactions, eBay has abandoned the second requirement.
eBay insists that its move away from requiring sellers to complete transactions with PayPal or cash was a response to eBay users’ complaints about the plan. However, it’s also likely that eBay was sufficiently scared off the plan after the Australian Competition and Consumer Commission (ACCC) issued a draft notice to eBay that denying consumers choice of payment methods may be anti-competitive. Putting on my lawyer’s hat, it looked like “third line forcing” under Australian law – where a company forces customers to use another company’s products or services in order to use the first company’s offerings.
Phil Leahy, president of the Professional eBay Sellers Alliance in Australia, said that eBay may have been using its Australian marketplace as an experiment to see if it could get away with requiring PayPal as the primary payment method. If it could, it would attempt to do the same thing in other markets.
That could be right if eBay was primarily concerned with its customers’ response to such a requirement. It doesn’t make so much sense if eBay was primarily testing the “regulatory waters” since the competition laws differ from jurisdiction to jurisdiction. It’s possible that eBay could get away with forcing customers to use PayPal or cash in certain jurisdictions where the competition laws – and regulators – are not so tough.
At the end of the day, eBay’s decision to back down is good news for eBay users, who retain the ability to choose the means by which they pay and receive payment.
Source: Mylene Mangalindan, “EBay Drops PayPal Plan Down Under”, The Wall Street Journal, July 10, 2008
