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eBay-PayPal Tie-Up Draws Complaints In Germany

Antitrust authorities take a look at situation

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This has not been a great week for American tech companies trying to do business in Europe.  First, Google got in trouble over allegedly anticompetitive search practices and its policy on Street View data retention.  Now, German antitrust authorities are looking at the way in which eBay has supported PayPal.

eBay

John Oates explained earlier today, "eBay.de recently asked sellers with low feedback points to offer PayPal.  The company justified the move because it said the number of bad buying experiences is twice as high from sellers with less than 50 feedback points than the average."

But some people are less than pleased with the change, and as a result, "[T]he German Federal Cartel Office is investigating complaints made against eBay over this tying policy."

Since the promotion of PayPal should increase its market share and help eBay earn more money, they may have a point.  eBay’s liable to have trouble arguing that there’s no other way it could protect buyers, at least.

As always, we’ll see what happens.  German authorities haven’t yet launched a full investigation or given an indication which way they’re leaning.  eBay, for its part, is still more in "dialogue" than "sound the alarm" mode.

eBay-PayPal Tie-Up Draws Complaints In Germany
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  • http://www.towercooler.com Tom Hargrave

    I used to buy and sell on eBay and used to have a PayPal account.

    But PayPal’s fees are too high – at least one point higher than a regular merchant account. I even tried offering PayPal chackout as an option in my web stores. They claim a 17% increase in sales for resellers offering PayPal but when I turned the service off late last year I saw no drop in sales.

    I believe they are leveraging their tie-in with eBay and their high visibility to pull a lot of cash from their user’s pockets.

  • Racer

    It is about time that an investigation is launched. The anti competitive practices of eBay are well known and documented! Buying PayPal and forcing users to use this payment method was for me the turnoff to ever deal on eBay again!

  • Guest

    Ebay forces sellers to use paypal as their only “approved” method of payment, then forces buyers to use it to make a purchase. Ebay owns both companies and profits from the use of both for a “double-dip” of fees on every single transaction made on ebay.

    Are they saying checks, money orders, bank drafts, credit cards and cash are no longer valid currency?

    Sounds like this investigation is long overdue.

  • http://www.CashSender.com Henry

    We are a new Canadian company that is launching a safe, secure, low fee payment service and we charge 1.5 percent transaction fee for every payment sent or received.

    CashSender eliminates the high fees related to cross border payments; business account status; use by international residents, and use of foreign currency.

    And we thought that ebay users should be given the choice to use our system, or at least know about our system.

    When we tried to communicate our service on ebay’s forums to tell their site users of our service all of our posts were immediately removed.

  • OldSchool

    A few months ago Ebay stopped posting my auctions because I did not accept paypal so I caved in and started accepting paypal.
    Recently I found out one purpose for their actions. I had a dispute with a buyer in which Ebay rended the decision that neither party was at fault. However, even though “neither of us was at fault” ebay reached into my paypal account and reimbursed the buyer for the full price including shipping. When I protested that said the decision was final. I am left with mo productand no money.
    Had this been a decision by Visa or Mastercard the buyer would have returned my item before he was reimbursed.
    A few months ago Ebay stopped posting my auctions because I did not accept paypal so I caved in and started accepting paypal.
    Recently I found out one purpose for their actions. I had a dispute with a buyer in which Ebay rended the decision that neither party was at fault. However, even though “neither of us was at fault” ebay reached into my paypal account and reimbursed the buyer for the full price including shipping. When I protested that said the decision was final. I am left with mo product and no money.
    Had this been a decision by Visa or Mastercard the buyer would have returned my item before he was reimbursed. Ebay would not have been able to reach into my Visa or Master account and take my money as they can with paypal.
    Ebay is completely focused on the happiness of the buyer and could care less about the seller. Theirs is a monopoly of such proportions that one seller more or less doesn’t matter to them as long as they can boast about buyer satisfaction.

    • Guest

      Hello,
      we have a lot of problems with PayPal.
      We are from italy and You?

  • http://www.sfpincchicago.com Shadow Fire Promotions, Inc.

    Agreed that any kind of anti-trust investigation is overdue. Paypal is the single most hacked entity there is on the web, yet Paypal touts how secure it is, when the holes in its security are documented all over the web.

    There are plenty of online payment sites out there, and a merchant account is quite reasonable, especially if you are a full time seller. Even part time sellers can secure a decent rate on a merchant account, and it’s not illegal to place a surcharge on your credit card orders to make up for the loss, unlike Paypal.

    Anyone with the slightest bit of knowledge of ebay’s practises knows how ebay uses Paypal’s vague and unclear statements to their advantage, such as the fictional “buyer protection policy”, which offers no real protection, but looks good on listings.

    Further, while ebay claims to be cracking down on fraud, it’s amazing that ebay is, was, and always will e a haven for bootleggers of all kinds, from designer clothing, purses, movies, etc. As long as you list enough that you stay above a certain feedback (and when you make computerised listings, it’s not difficult to have literally 1,000s of listings daily), and continue to put money in ebay’s pockets, they have a reputation for looking the other way.

    Customer service for either Paypal, nor any of its owned entities is non-existent, and they continue to make money, yet raise prices each year.

    It seems that not just with Paypal/ebay, but with many other huge conglomerates, they ultimate goal is not to prove that you are the best, but merely to become large enough that you can re-define your field and shut out other competition.

    From Comcast’s near-monopoly in many states, to World Wrestling Entertainment’s virtual monopoly of professional wrestling, to the Ultimate Fighting Championship for Mixed Martial Arts to Ebay, and Paypal. All of these companies have one thing in common. When you think about their field of business, you think of them first. Example? Pro wrestling=WWE, the first thing that comes to people’s minds. Sell online=ebay. Pay online=Paypal. Once you can leverage yourself into that position, then you can cease to work and set the rules yourself, as ebay and Paypal have done.

  • Guest

    Paypal and Ebay have been laws to themselves for longer than I can remember, I used to be a Powerseller on Ebay but due to extortionate Ebay and Paypal fees I found new avenues to sell products. When you consider to sell an item you have to pay an Ebay listing fee, then an Ebay selling fee and then a Paypal fee and all these fees are really for one company it is ridiculous, your profit margin has to be considerable to make a decent net profit.
    Plus the fact that Ebay and Paypal are ‘Power freaks’, you do as they say or they suspend your account and, in Paypal’s case they hold onto your funds, not even a high street bank can do this. Paypal’s small print is silly and would not be legal within any physical world law.
    Go to http://www.paypalsucks.com/ and read some of the horror stories.
    Oh and almost forgot, when you have a problem try speaking with someone on the telelphone at Ebay….almost impossible ! Even a letter in the post is ignored. I remember having a serious issue with Ebay and all I got was automated emails so in the end I decided to write letters to 13 contacts at Ebay and Paypal (yes 13). These names were senior positions because my issue I felt was serious.
    How many replies ? One. Just one reply. Not dated, not signed, no telephone number, no email address, no physical address, NOTHING. My issue wasn’t addressed at all. It was basially a copy of one of the automated emails I had already received !
    They are one of the richest companies in the world but no telephone support at all.
    They do not even police their own website, they rely on its members to police their site and then take action against members without even investigating the issue !
    Ebay will fade and die, they grew to big too quick and totally ignored that it was it’s members that gave them their success. Try getting a bargain on Ebay these days, it is full of professional traders now as no ‘normal person’ can afford the costs involved.
    My advice ? Search Ebay for your needs, read the data and descriptions and do your product comparisons…… then Google it and buy from the other websites as you will find it cheaper and have a choice in how you pay.
    Remember go to http://www.paypalsucks.com/ and do your due diligence.
    Note: I have no association with Paypalsucks.com I just learned how bad Paypal is and you should too.

  • Guest

    eBay and Paypal have been abusing buyers and sellers in 3 countries mainly, USA, Canada and UK. The rolling reserve abuse for up to 2 years of holding your money!! ( whats the law here? ) allowing abusive well known buyers to open disputes left and right because paypal will enjoy at about a 3 to 4 week holding the “dispute” funds and the amazing effort that eBay makes to make other payment systems very hard, if not impossible to integrate in any transaction. What about Google Checkout, Amazon payments, xoom or famous credit card processing companies such as authorize.net? These companies are well known, they have strong security systems and should be allowed. eBay even has this thing where you have to put “paypal is recommended” in your listings to boost confidence?
    Holding the money for transactions and specially rolling reserve is illegal and the IRS and other institutions should take a look at how paypal is using the funds, they say they don’t but who is there to tell? they can even use it as collateral to get profitable deals, more stock market scams and other tricks. The rolling reserve is an abuse of holding more than $400 million dollars at any given time for months or years mainly done in USA, Canada and UK, I bet they don’t try that in Germany. I cannot wait for the day a smart law firm sees these cases to make a real very profitable lawsuit against the ungrateful companies who have been abusing the ones who made them.

  • http://caligonia.com/poker Guest

    I recently stopped using Paypal to process customer payments and have found a ZERO reduction in sales. In fact, we have actually seen an increase in users reaching checkout pages since many people worldwide do not trust paypal.

    It is interesting to note that the USA has not looked deeper into the antitrust issue with Paypal attempting to dominate the Internet processing of payments.

    Seems paypal is getting involved in every aspect of electronic payments, even joining the GreenDot Financial market and the WalMart Financial services.

    Merchants worldwide should keep in mind there are plenty of alternatives to getting paid and Paypal, although it may appear convenient, is a huge turnoff for many customers.

    Merchants should try split testing their options with alternate processors to see if using Paypal is justifiable for your business.

    My opinion is that Paypal is trying to dominate the Internet Financial markets in the same respect Google dominates the Search markets.

  • http://www.coolantrepair.co.uk Andrew Preston

    I sell on eBay, as a small part-time business. This evening an item sold, the customer paid. Shortly afterwards I received a ‘payment notification’ from Paypal to say that the payment would not be available to me for 21 days. I have to pursue this with them tomorrow, but I have a 100% perfect eBay record. Ultimately, in my opinion, it will be necessary to separate Paypal, from eBay. Far too much power in one set of hands that control both the shop platform, and also a primary payment mechanism. Very anti-competitive, and has been quite obviously so for years.

  • http://www.controldatainc.com agency collection

    We had a client that had the same problem with a dispute. Ebay and paypal didnt care to even investigate it. Then 9 years later, paypal sends it to a collection agency to try and collect. They made treats to file suit, garnish wages, and place on the credit bureaus all of which can not be done because its past the statue of limitations.

  • http://www.46lcdhdtvreviews.com 46lcdhdtv

    There are worsth sellers use paypal.Please buy with carfully.

  • Guest

    here in Italy ebay have imposed that ALL USERS MUST ACCEPT PAYPAL

    there in Germany only if the seller has less then 50 feedback ?

    We are writing a recourse to Italian authority

  • Guest

    I am from Italy and here in Italy PayPal is obligatory for ALL USERS ALSO WITH A GREAT NUMBER OF FEEDBACK.

    I would know if it is the same in other countries.

    We are writing a recourse to authority

    Awaiting for reply

  • Guest

    Now Ebay is is creating parameters for witholding Paypal payments for up to 21 days. A seller gets around this by using Paypal invoicing and shipping label services which costs money. And of course. these holdbacks keep cash in Paypal’s/Ebay’s operating account for longer periods at no cost to them. Ebay should be forced to divest itself of Paypal, and buyers and sellers should be able to choose from other payment agencies. This is something for US Competition Regulators to sink their teeth into.

  • http://JazzRock-Radio.com Guest

    eBay+PayPal = Simple and obviously unbridled GREED

  • http://www.giannasgems.com Guest

    I’ve never had a problem with Paypal only to say that eBay is not handling themselves properly.
    They certainly are overcharging when it comes to paypal and ebay charges combined and every other day there are new rules-Ebay’s rules.
    It is harder to sell on ebay and have them trying to push a seller into putting their prices down (coming into effect) and free shipping.
    I remember when there were many free shippers-not now-I remember when ebay was fun-not now
    I remember when one would have a selection-not now-
    And, to have “ebay” push sellers into accepting paypal is not the Amercan way of doing business.
    I hope Germany wins this case-Americans ebayers should have set forth a case than to have it get out of hand the way it has.

  • Linda Fishback

    Christmas 2010 I purchased most of my Christmas gifts from E-bay. It all became a big nightmare. Every item I purchased that was used was not as stated. One item I purchased was from a Chinese man. It was and x-box 360 game. I received and e-mail shortly after the auction. Stating that I might not receive this item. I checked my records. This Seller was suspended from selling on e-bay. A few weeks later after fighting with e-bay to return my money. The Seller sends me a copy of a game. Everything about the item was fake. Now e-bay wants to keep my money and have me send the item back. I stated I will send this game to the security department of e-bay. So that they can see what this Seller is doing to buyers on e-bay. But e-bay sticks to there guns. They become like the Seller and they take from the Buyer. Because that keep money in there pocket by doing that. But I’m not done with e-bay yet. They hire crooks to sale fake items. So that they can make a profit off buyers. This company will go down. They caused my Mom to have a major heart attack. They faught and faught with her until she fell over. She was rushed to the hospital. She had a major heart attack. Ebay nearly killed my Mother.

  • http://www.screw-paypal.com John Boilaue

    This story shows a very interesting development in that it shows how the anti-competition tactics that they have pulled in the US (and received no offical pressure) does not sit well with Europe who tries to be more fair in their competition. Websites like http://www.screw-paypal.com and PayPalsucks.com are out there for a reason and remain popular for a reason: honest well intentioned people out there seek these kinds of sites out because there are people have legitimate problems with companies like PayPal and eBay — and both companies seem to turn a blind eye and deaf ear towards people who appear to have been screwed through no fault of their own. Good article here.

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