Australia Tells eBay It Can't Require Auction Users Only Use PayPal

from the competition-is-good dept

Thu, Jun 12th 2008 3:41pm — Mike Masnick

Slashdot points us to the news that Australian regulators have slapped down eBay's attempt to require users to use PayPal as a payment system, noting:

"Given eBay's position as Australia's leading online marketplace, the notified conduct will substantially reduce competition to supply online payment services to users of online marketplaces more generally. The ACCC acknowledges that having PayPal as the only payment provider has the potential to deliver some benefits to users, such as increased buyer protection insurance in certain circumstances. However, the ACCC believes that consumers are in the best position to decide which payment method is most suitable for them."

eBay's plan to ban all other payment system received a ton of negative publicity when first announced, so perhaps Australia's response isn't all that surprising. However, is it really necessary for the Australian government to step in? The anger from eBay users was quite strong, and you would think that the end result would be eBay users leaving for other online e-commerce options -- and that, alone, should be enough to get eBay to reconsider this decision. eBay shouldn't need to have the Australian government tell it that restricting payment options is a dumb idea. Consumers were already doing so. And, if we go by the ACCC's own words, it supposedly "believes that consumers are in the best position to decide" which e-commerce platform is most suitable as well.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: accc, auctions, australia, competition, payment services
Companies: ebay, paypal

31 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Raving Lunatic, 12 Jun 2008 @ 5:07pm

Granted eBay owns Paypal but...
When I go to the store and the clerk tells me I can only pay by cash not debit or credit card what do I do... Cry to the government to step in and make him take my Visa? No, I suck it up and pay him cash, his preferred method of collecting payment. Should this be any different for eBay?
[ link to this | view in thread ]
Anonymous Coward, 12 Jun 2008 @ 5:16pm

Re: Granted eBay owns Paypal but...
It's not any different for eBay, except it doesn’t take a person 15 minutes to drive to the next store; it’s just a click away. So if they want to keep their customer base they're going to have to give somewhere if they want to appease all parties involved.

So no, a government shouldn't have to step in to say a business cannot use their own system for remote payment methods. I see it as no different than a magazine that only accepts credit card payments, the only difference is you aren't speaking to a person. If you care to consider identity theft or fraudulent charges of any sort, not having to give out personal information to another person could be viewed as beneficial. As Mike states, if people don't like the service being offered they have plenty of other options, and if a business wishes to piss of their own customers, thought highly ill advised, it's of their own prerogative to do so.
[ link to this | view in thread ]
Sven, 12 Jun 2008 @ 5:20pm

Are you kidding....
The ACCC(Australia Competition and Consumer Commision) is doing its job. If the ACCC decides that the move to restrict payment methods contravenes applicable laws, and it is not in the consumers best interest to provide an exemption, so be it. They are there to protect consumers not pander to big business (someting our US cousins may not fully understand)

Whilst consumers vote with there feet, when there is little competition, there may be few other options to choose.

This was nothing more than ebay attempting to secure more revenue by forcing customer to a transation method they own, and charge fees for the privilege. No wonder the decision was not popular.....
[ link to this | view in thread ]
jeffj (profile), 12 Jun 2008 @ 5:34pm

"and you would think that the end result would be eBay users leaving for other online e-commerce options"

Uhh... there are no other options. That is why e-bay can raise rate and screw with feedback systems and not have any customer support and allow fraud....because they (and users) know that there is no where else to go if you want to your product to be seen by millions of people.
[ link to this | view in thread ]
Ian, 12 Jun 2008 @ 5:42pm

Mike, I know you were just expressing your opinion here, but what's the point this time? Consumers have been given their payment options back, and you complain about it. Sure, the problem may have fixed itself through consumer dissatisfaction and complaints, but it's always a good thing that consumers have ANOTHER option to make their complains heard, particularly an official government body created to protect consumer rights.

Consumers still get their payment options back either way. If the ACCC didn't do its job, we would have read another awesome opinion about how the ACCC didn't do its job to protect consumer rights.

So what is it that you're actually complaining about? I just see whinging.
[ link to this | view in thread ]
Anonymous Coward, 12 Jun 2008 @ 5:57pm

JHC
Look at eBay's track record: if they went by your ideals, "let the market sort it out", they would give the users the finger and keep on doing whatever the hell they want; to wit, the current "sellers can't leave negative feedback" and "sellers can't access money for 28 days because we said so" crap. SOMETIMES, the government and legal bodies NEED TO STEP IN and bitch-slap some sense into people.
[ link to this | view in thread ]
Gillian, 12 Jun 2008 @ 6:58pm

ACCC
The ACCC is not the government (as the government has noted much to its own chagrin when it's been slapped down). It is an independent review body set up to ensure that consumers are protected, particularly from big business trying to railroad others . I say three cheers for the ACCC! It's doing its job.
[ link to this | view in thread ]
Faceless Minion, 12 Jun 2008 @ 7:03pm

Mike, I normally love everything you write, but seriously, have you SEEN what Ebay has been doing recently? From all indications they will quite gleefully screw people over, and there is not really anywhere else to go that has the same feel or user base as Ebay.
[ link to this | view in thread ]
Doug Robb, 12 Jun 2008 @ 7:10pm

Re: Are you kidding....
I agree totally with the ACCC position as well. You can't have a situation where a small market (like Australia) is picked off to implement something so anti competitive when clearly if it were such a great thing for consumers they would do it world wide off the bat? Whay are we to be so lucky to get this great new "service"?

They thought they could get away with it here and force themselves into consumers bank accounts - well think again!

They are not a law unto themselves and the ACCC has a role to play in monitoring these sorts of dubious business practices in the Australian market (especially given their dominant position).

The Music industry milked the Australian market for decades but that's another story ....
[ link to this | view in thread ]
Lawrence D'Oliveiro, 12 Jun 2008 @ 7:36pm

Laws to Keep Free Market Free
A free market doesn't stay free by itself: it needs laws against anticompetitive practices like price-fixing, collusion, deceptive advertising, insider trading, predatory pricing, and just plain fraud.
[ link to this | view in thread ]
Anonymous Coward, 12 Jun 2008 @ 9:27pm

Pay Pal
Personally, I find it muct more convenient, secure, and protective of a purchaser to use eBay than to use direct purchases by sending credit card data directly to the auction seller. At least PayPal has a track record and does attempt to provide security for important financial information, not to mention a dispute resolution method.

It is easy to understand why eBay wants to migrate to PayPal, which involves whatever credit card a purchaser chooses to use, and which card can easily be changed by a few clicks of your mouse.
[ link to this | view in thread ]
BaronKarza, 12 Jun 2008 @ 9:40pm

So LONG EBAY!
As many of you know ebay has hiked fees recently, and in the last couple of days ebay has also changed its feedback policy so that you can no longer leave negatives for shitty buyers. They are also penalizing sellers with reduced search if your buyers don't rate you above a 4.5 in the detailed seller rating system. The potential for abuse of this new system, coupled with the higher fees, along witha slowdown in the ecomony has me looking for alternative places to sell.

Here's what I found already:

http://www.wigix.com/ (free to sell items under $25 bucks)
http://www.delcampe.net/
http://www.ecrater.com/
http://www.onlineauction.com/
http://www .neoloch.com/
http://www.ebid.net/
http://www.etsy.com/
http://www.ubid.com/
http://www.ioffer.c om/
http://www.bidville.com/
http://www.bidtopia.com/
http://www.ewaey.com/index.php?
http://www .gozbay.com/index.php
http://www.craigslist.org/about/sites.html
http://walmart.oodle.com/
http:/ /auctions.overstock.com/
http://www.amazon.com/
http://www.ioffer.com/item_transfers/mr_grabber

http://www.powersellersunite.com/auctionsitewatch.php

http://www.google.com/base/storeconnector/ index.html
[ link to this | view in thread ]
Crit_Thinker, 12 Jun 2008 @ 9:56pm

Re: Granted eBay owns Paypal but...
Your analogy is a bit off.

eBay is not the "store". A correct version of your analogy would be:

If you go into the store and have Discover. The store cannot accept anything but Visa, because Visa's parent company is the government and the government wont let any stores within the jurisdiction of the government accept anything but Visa.

As the store owner, you might be angry at the government because that restriction limits your customer base. You as the consumer also might go elsewhere that you can use your Discover.

eBay clearly needs to fire some people over this idea. Perhaps re-organize their board too. Not too smart.
[ link to this | view in thread ]
Pseudonym, 12 Jun 2008 @ 9:59pm

No different from Microsoft
Essentially, this is no different from the Microsoft case: eBay tried to use its near-monopoly in one market (online auctions) to gain a near-monopoly in another market (online payments).

However, it goes a bit deeper here. eBay Australia is a rented office with a couple of people in it. eBay technical support is one phone number in Sydney which redirects to the USA. It's not a real "presence". eBay doesn't even provide a way to add GST (Australian sales tax) to purchases contained entirely within Australia.

Additionally, PayPal refuses to agree to the Electronic Funds Transfer code of conduct. So not only are consumers left with no choice, Australian eBay users would also be left without a method of payment which actually abides by the laws that govern Australian financial institutions.

These weren't 100% relevant to the ACCC's findings, but the Reserve Bank of Australia did make a submission which noted that they were investigating this stuff, and it might be relevant that it would be wrong to require a payment method which may turn out to be not entirely legal.
[ link to this | view in thread ]
TechNoFear (profile), 12 Jun 2008 @ 11:14pm

Market Power
Mike >

As Australia has less than 10% the population of the US we have very little market power to leverage against these companies.
Many online companies bluff us out. The companies know we have little choice (isolation and market share) and take advantage of Australian consumers.

I am glad an Australian government body enforces the local laws, especially when they defend the Australian consumer against a multinational.

I think Australians would have much less trouble with these type of issues if the US government protected the US consumer as well as the ACCC does us.
[ link to this | view in thread ]
Anonymous Coward, 13 Jun 2008 @ 6:00am

As has been mentioned, the ACCC is not the Austrlian Government, but an independent statutory commision that acts as an administrator of the Trade Practices Act (TPA). The TPA defines the behaviour that business in Australia must comply with. It covers things like monopolistic behaviour, warranty, goods being fit for purpose etc.

The fact that Australia is a small market has nothing to do with this. The fact that eBay owns PayPal has nothing to do with this. eBay operates in Australia and I suspect that it is a registered Australian Business although I could find no ABN on their website but did find an ABN for PayPal. eBay must comply with Australian law when operating as a business in Australia. By restricting payment to a service offered by a business ie PayPal, eBay was asking for exemption from aspects of the TPA which covers competition and probably monopolistic behaviour.

The ACCC evaluated the responses and the TPA and have decided that they will probably reject eBay's request. There is now a period of time where further submissions can be made on this draft notice, before the ACCC issue their final notice.

It is a good thing that the request will be rejected (in my opinion). eBay is using their market dominance in the Australian online auction market to restrict competition in ways they accept payment. This is a no no under the TPA. Yes, the users of eBay have screamed foul, but if the ACCC agreed to eBays request, then eBay could legally enforce this restriction of trade. Yes its a dumb idea, but eBay asked ACCC for a ruling and the ACCC is responding.
[ link to this | view in thread ]
sonofdot, 13 Jun 2008 @ 7:06am

I guess you're not very familiar with eBay
However, is it really necessary for the Australian government to step in? The anger from eBay users was quite strong, and you would think that the end result would be eBay users leaving for other online e-commerce options -- and that, alone, should be enough to get eBay to reconsider this decision. eBay is notorious for completely ignoring its users and doing whatever the hell it wants. For the most part, it seems eBay doesn't give a rat's ass about its users, so long as it believes whatever it's doing will further line the pockets of its executives and shareholders.
[ link to this | view in thread ]
John Medcalf, 13 Jun 2008 @ 3:31pm

Paypal so lame I quit ebay
Like I said in the title.
Love Google Checkout. No fuss. No bank account invasion.
Hats off to government regulation.
[ link to this | view in thread ]
Anonymous Coward, 13 Jun 2008 @ 3:31pm

Re: Re: Granted eBay owns Paypal but...
eBay is the store; it's the place you go to buy the good. Just like when you go to a grocery store, the good you are buying generally isn't produced by the company you are buying it from; the difference being eBay is not a reseller. A more appropriate analogy might be comparing eBay to a staffing firm.
Just like a staffing firm, eBay has some clients who have a good that they wish to sell and some clients who wish to buy a good. If you are an employer (buyer) and are looking to hire on new staff you can go to this firm (eBay) and browse through a list of applicants (seller). Once you have chosen an applicant (purchase of the good), in order for the transaction (sale) of the good to be complete, an agreed upon method of compensation (payment) will be given to the buyer (via cash, credit, doubloons, concubines, etc...). In this case the applicant's (seller’s) personal information (good) is being delivered (sold) to the client (buyer) through the agency (eBay), and the preferred method of payment is exclusively through PayPal.
Now if the staffing firm wishes to accept payment from traveler’s checks only, they certainly have the right to do so. It might not be a convenient method of collecting payment, but the company is by no means obligated to accept all forms of payment delivery. If this company has an arrangement with the company that manufactures the checks and gets $0.05 for every check sold, then it's certainly profitable to only accept this method of payment. However, if limiting clients to only one method of payment results in upsetting everyone, then they have to make the decision of either appeasing the customer or risk loosing business.
At no point should the government have to step in to say what should be allowed or not. If a company wants to piss off their customers It’s their own choice. Likewise, it’s one’s own choice if they want to be limited to one form of payment. That decision will be influenced with how good of a service is being offered, and its exclusivity. The government should only get involved if a situation developed where a good essential to human functionality (health and sanitation matters) began to affect a person’s way of life. So, if all the grocery stores in town only started accepting some ludicrous form of payment that became a huge inconvenience and hindrance that affected a person’s ability to feed themselves, then government adjudication would be in order. It’s simply a choice of conducting business and how successful that company wants to be.
[ link to this | view in thread ]
Anonymous Coward, 13 Jun 2008 @ 3:34pm

Re: Re: Re: Granted eBay owns Paypal but...
.. dont know what happened to spacing between paragraphs.
[ link to this | view in thread ]
Dr. Klahn, 13 Jun 2008 @ 3:38pm

Well, they did it here
There was a lot of complaining when ebay US required that all sellers accept Paypal. This was OK when you could say "Paypal cash transfers only."

Then ebay started taking down any listing that said this, and stated "If you are going to accept Paypal, you must accept any type of payment." This was OK when you could say "I don't accept Paypal."

Now ebay requires all sellers to accept Paypal. The only way a casual seller can accept a credit card transfer is to give them your bank account number so they can clean it out at will. And that was OK when you gave them an account number with $20 in it that wasn't linked to your real bank account.

Now Paypal says "You can only have 5 credit card transactions in a year unless you pay us for a Business or Premier account. And that is OK for me, because a 35 cent listing fee plus 5% of closing plus 40 cents to Paypal plus another 5% of the closing to Paypal (remember, ebay owns Paypal, so this is 75 cents plus 10% of closing) makes it clear they don't want to deal with individual sellers any more.

Well, I say to the Australians: "Good on yer, mate!"
[ link to this | view in thread ]
Jon, 13 Jun 2008 @ 3:46pm

Re: Re: Granted eBay owns Paypal but...
So if they want to keep their customer base they're going to have to give somewhere if they want to appease all parties involved.

Actually, its exactly the opposite. If you want to use Ebay, you play by their rules or dont play at all. Its really that simple. Governments should butt the hell out.
[ link to this | view in thread ]
Laurent GUERBY, 14 Jun 2008 @ 1:55am

Patents
Government grants patents to ebay so consumer can't escape them because of government granted monopolies, so it's not surprising to see government has to come back and clean up some stuff.

It would be better of course not to have those government granted monopolies in the first place, but since they are there's no choice for the government to intervene more.
[ link to this | view in thread ]
K, 16 Jun 2008 @ 6:06pm

Re: Market Power
Mike,

I'm an American citizen who wishes to express her most sincere apologies to all Australians for the corporate arrogance of Ebay. God bless you all and keep up the good fight! I for one am deeply embarrased by the audacity of an American corporation thinking they can circumvent the laws of any country! Our elections are coming up, I hope we will become a country I can feel proud of again!
[ link to this | view in thread ]
Tom, 21 Jun 2008 @ 2:47pm

paypal and ebay AU lies again and lawyer's lie
http://pages.ebay.com.au/useprotection/changes.html

Now

All items listed for sale on eBay.com.au must now offer PayPal as one of the payment methods.

PayPal Buyer Protection has increased to AU$20,000 for PayPal and Visa/MasterCard transactions.
For a small number of categories (eg vehicles, services, real estate and businesses) there are some exceptions.

15 July 2008

All items appearing on eBay.com.au must be paid for using either:

• PayPal
• Visa/Mastercard (if you don't have a PayPal account)
• Pay on pick up (i.e. paid for when picking up the item)

No other payment methods will be permitted. ( what? no personal checks, money order, cashiers.)
A message from our lawyers

The PayPal service is provided by PayPal Australia Pty Limited (ABN 93 111 195 389) which holds an Australian Financial Services Licence, number 304962. eBay is an authorised representative (AGENT), number 308318, of PayPal for the purpose of providing information about PayPal. eBay and PayPal are not acting as your (AGENTS), are not providing personal financial advice to you and do not take your individual circumstances into account in providing information about PayPal. You should consider the Financial Services Guide and Product Disclosure Statement before deciding to sign-up for or use the PayPal online payment service at https://www.paypal.com.au.

PayPal Buyer Protection and PayPal Seller Protection are also subject to the terms and conditions in PayPal's User Agreement, incorporating the Buyer Protection policy and Seller Protection policy which include details on eligibility criteria and the discretionary nature of the Policies.

agent:
Function: noun
Pronunciation: 'A-j&nt
Etymology: Middle English, from Medieval Latin agent-, agens, from Latin, present participle of agere to drive, lead, act, do; akin to Old Norse aka to travel in a vehicle, Greek agein to drive, lead
1 : one that acts or exerts power
2 a : something that produces or is capable of producing an effect : an active or efficient cause b : a chemically, physically, or biologically active principle
3 : a means or instrument by which a guiding intelligence achieves a result
4 : one who is authorized to act for or in the place of another: as a : a representative, emissary, or official of a government b : one engaged in undercover activities (as espionage) : SPY c : a business representative (as of an athlete or entertainer)
[ link to this | view in thread ]
jim robinson, 29 Jun 2008 @ 2:23am

ebay
I have been a buyer and seller on e'bay for over six years, and have over 500 feed back point at 100% pos', after finding out that ebay have gone ahead with the pay pal thing have decided to pull out and give it the flick, I am look'n for a new site that looks after it's sellers instead of it's pocket after all where does ebay's money come from.
I'm realy a pist off e'bayer, thanks for your time, Jim.
[ link to this | view in thread ]
Steve Fouracre, 5 Jul 2008 @ 3:03pm

Re: So LONG EBAY!
Try bideasi also, bideasi has exactly the same concept as Wigix, but without the issues that you have pointed out above.
[ link to this | view in thread ]
Adrian, 4 Feb 2009 @ 12:04pm

ebay alternative www.bonanzle.com check it out its farely new, its users are growing.
[ link to this | view in thread ]
2recker (profile), 3 Jul 2009 @ 5:58pm

Re: So LONG EBAY!
In 2009 you'd like to be a movie star?
Well we can’t promise that, but we can make you a video auction star!
People are using internet video auctions at http://www.ubid4it.org to sell lots of stuff these days. Video auctions, sells better than anything else. And a potential customer is much more likely to feel comfortable about a purchase, if they have seen the product in full detail and described to them.
[ link to this | view in thread ]
Laura Wilson, 3 Aug 2009 @ 11:21pm

VIVA AUSTRALIA!
AM I THE ONLY AMERICAN WHO SEES HOW LUDACRIS THIS SITUATION IS? TRYING TO SEPARATE EBAY FROM PAYPAL IS LIKE TRYING TO SEPARATE GEORGE BUSH FROM HALIBURTON.
[ link to this | view in thread ]
rosy3095, 20 Aug 2009 @ 12:39am

Re: So LONG EBAY!
this is the free online auctions site Online Auctions
[ link to this | view in thread ]