Cheryl JUpdate on Is eBay about to seriously rip off its users
June 17th 2008 10:35
IMPORTANT UPDATE!!!
Further to my post Is eBay about to seriously rip-off its users? CLICK HERE the ACCC has found that eBay's conduct is anti-competitive. Below is the ACCC's draft notice and eBay's action. The saga continues but the ACCC has delivered a huge blow to eBay / Paypal in their attempt to bypass the rules of the Trade Practices Act.
The ACCC notice
The Australian Competition and Consumer Commission has issued a draft notice proposing to revoke a notification* lodged by eBay International A.G. on 11 April 2008.
"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.
"PayPal currently competes with a range of other providers to supply online payment services to users of online marketplaces. If the notified conduct is allowed to go ahead, there will be no competition for the supply of such services to buyers and sellers using eBay.
"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.
"The notified conduct denies them that choice. Accordingly, the ACCC considers that these benefits do not outweigh the anti-competitive effects of the conduct," Mr Samuel said.
eBay proposes to implement the conduct in two stages. From 21 May 2008, all sellers on eBay were required to offer PayPal as one of their accepted payment methods. The second stage of the conduct is due to commence on 17 June 2008, with the requirement that all transactions on eBay must be paid for using PayPal or cash on pickup.
"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," Mr Samuel said.
eBay and interested parties now have time to lodge submissions in response to the draft notice, before the ACCC decides whether to issue a final notice revoking the notification.
eBay's response is...
As you may be aware, a number of changes were scheduled to come into effect on eBay.com.au on 17 June 2008.
Most of these changes have been delayed by almost one month and are now scheduled to commence on 15 July 2008.
My Response
Hopefully this delay of one month will become permanent and this will be a win for the small guy and common sense. At least the ACCC can see it for the transparent grab for cash and power that it is.
Is eBay about to seriously rip off its users?
Sources: ACCC and eBay
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Comment by Morgan Bell
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thanks for the update Cheryl
personally i think you should be our new national watch dog!
Comment by Cheryl J
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Comment by Johnny Come Lately
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thanks for the update
Comment by James Rickard
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Comment by Lara M
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Comment by Australian Fashionista
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Great Post! I was just one of the frustrated & helpless so it's great to see something may be done about this.
I was looking for the asterix reference to your first paragraph after notification;
Comment by Australian Fashionista
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It's not that different to "Safeway Petrol Stations"... Bummer...
Comment by Cheryl J
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Hey James, yes it's good to see the wheels turning. I don't know how it will end up when challenged but at least they are not granting them outright immunity for something which clearly breaches the Trade Practices Act.
Hi Lara, the bigger the companies get the greedier they are, I always find that astonishing.
Hey there Australian Fashionista. Sorry about that, I cut that out by accident that portion is as follows:
*By lodging an exclusive dealing notification with the ACCC, a party obtains immunity from court action for that conduct. In this case, immunity is conferred automatically when the notification is lodged. Once the ACCC receives a notification, it reviews the purpose and effect of the notified conduct. If the ACCC forms the view that the conduct substantially lessens competition, and that it does not deliver a net public benefit, it may issue a draft notice proposing to revoke the notification. After considering any submissions from interested parties in response to the draft notice, and conducting a conference if any of the interested parties call for a conference, the ACCC must decide whether to issue a final notice.
To answer your question, absolutely. They could have avoided the whole mess by merging BUT, whist they stay as separate entities they can charge the seller twice; once with the normal eBay seller insertion and completion of transaction fees and then PayPal charges its own fees therefore double dipping. It's sheer greed.
Thanks for all taking the time to comment. When final rulings or action is taken I'll be updating on it.
The funny thing is, I love eBay and shop on there all the time. I even sell stuff but the PayPal fees made it hard for me to sell little odds and ends in Australia. I liked being able to offer PayPal to overseas customers and for larger purchases within Australia but I also liked giving people the option of bank transfers on small items to keep my fees down so I can make a profit but this has totally rankled my sense of justice and fairness.
And also, the only time I have ever had a problem as a buyer was with a seller that had begun to use PayPal. There was so much confusion and payments being made that weren't going through that the poor guy selling to me opened a non-pay dispute. It was only after I showed him printouts that he saw that the problem stemmed from an issue with PayPal. It was sorted out amicably but just proves that it is just as fallible a payment system as any other.
Comment by Clint Emry
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