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EcommerceBytes-NewsFlash, Number 1833 - July 14, 2008 - ISSN 1539-5065    3 of 4

PayMate Files Complaint Calling eBay's PayPal Policy Anti-Competitive

By Ina Steiner
July 14, 2008

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Paymate objected to eBay's online-payments policy in a complaint filed with the Australian Competition and Consumer Commission (ACCC), claiming eBay Australia is acting in an anti-competitive manner with regard to its online payments policy. In addition, sellers have said they plan to fight eBay's new policy through letter-writing campaigns and possible court proceedings.

The complaints come after eBay backed down from its plans to make its Australian marketplace PayPal only - something it outlined as "Stage 2" in its initial notification to the ACCC government agency that oversees the Trade Practices Act 1974 (TPA). But eBay Australia continues to require sellers accept PayPal, as outlined in "Stage 1" of the ACCC notification, even after withdrawing its notification.

The ACCC told AuctionBytes that eBay Australia's mandate that sellers accept PayPal would be unlikely to raise trade practices concerns. But PayPal's competitors and eBay Australia sellers do not agree, and eBay may be unable to put the "genie" back in the bottle. In the UK, eBay also mandates sellers accept PayPal, but eBay did so with no notification to any government agencies.

In Paymate's complaint to the ACCC it wrote, "We consider eBay's conduct (notified as Part 1 under their prior notification) as a restrictive practice that is harming Paymate's business - both on eBay and via implication as a "less safe" service, outside eBay."

Paymate said eBay's practice "significantly restricts the ability of Paymate or other payment options to be adopted" because eBay mandates PayPal for sellers; requires that sellers not express a preference for any particular method; promotes PayPal aggressively to buyers to imply it is the "default" method; provides no or little information about alternative methods for assessment by buyers and sellers.

According to a statement on its site, Paymate also strongly objected to the inference in eBay's publicity that PayPal provides better safety than Paymate, calling the claims "misleading and/or deceptive in breach of s 52 of the TPA."

Paymate wants the ACCC to ask eBay to immediately cease its conduct or face prosecution by the ACCC in the Federal Court. In addition, it recommended the ACCC ask eBay to make available factual information on all accepted payment methods to both buyers and sellers on an "equal footing" basis, and to communicate the changes to policy and information on all payment methods clearly and prominently on the eBay website as well as via email communications.

Meanwhile, sellers may initiate their own action against eBay in the courts. According to a forum post, a group represented by Tony Green has coordinated writing campaigns to politicians and banks and other organizations to register their protest of eBay's policies, and said it would launch a further series of initiatives:

Mr Tony Green, the group's spokesman on legal matters, announced today that "... as ebay's response to member's legitimate concerns is woefully inadequate it is now time to commence our next offensive which will be to seek remedies through the courts". Mr Green went on to say "Ebay's recalcitrant behaviour has pushed us to the point that we must now use the legal system to bring ebay into line with decent trading practices."

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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