Australia Puts Brakes On eBay PayPal Only Plan

    June 12, 2008

The Australian Competition and Consumer Commission (ACCC) have told eBay to put its plans to move to a PayPal only system on hold.

"The ACCC is concerned that the notified conduct will allow eBay to use its market power in the supply of online marketplaces to substantially lessen competition in the market in which PayPal operates," ACCC Chairman, Mr. Graeme Samuel, said today.

eBay planned to move to a PayPal only system in two stages. Beginning May 21, 2008 all sellers on eBay were required to offer PayPal as one of their accepted payment methods. Then on June 17, eBay would require all transactions on the site be paid using PayPal or cash on delivery.  

"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," Samuel said.

The ACCC said 650 eBay users had sent submissions with the majority opposed to eBay’s plan to move to a PayPal only system. They voiced concerns about the restriction of choice, increased fees and issues about PayPal’s security.

"In light of the serious competition concerns raised in the draft notice and the significant concerns raised by interested parties, I have asked eBay to delay implementation of the second stage of the conduct until a final decision is made by the ACCC," Samuel said.

eBay and interested parties can now submit responses to the ACCC’s decision to order eBay to put its plan to move to a PayPal only system on hold. The ACCC will determine if it will allow eBay to go to its PayPal only option.