eBay backs down on PayPal requirements

By Liz Tay on May 14, 2010 1:35 PM
Filed under Sales & Marketing

ACCC discontinues investigation.

Online auction site eBay will no longer force Australian sellers to use its subsidiary, PayPal, following an investigation by the Australian Competition and Consumer Commission (ACCC).

Since 2008, the auction site has required that sellers use PayPal alongside other payment options, claiming to encourage methods "that are safe, easy to use, reliable, and offer high levels of protection for users".

But the ACCC was concerned that the requirement may reduce competition in contravention of section 45 of the Trade Practices Act 1974.

From 14 July, eBay will amend its policy so that sellers can choose between three required online payment methods - PayPal, Paymate and credit card - in addition to offline options.

The move was announced yesterday and welcomed by the ACCC, which had received a "substantial number of complaints" about eBay's Accepted Payment Policy.

"The ACCC considered a large amount of information as part of its investigation and considers this is an appropriate outcome," according to a statement from the Commission.

"The ACCC has decided to discontinue its current inquiries into eBay's payment policies. However, this does not restrict the ACCC from reviewing the effects of eBay or PayPal's conduct in Australia if it raises competition concerns in the future."

eBay acquired PayPal in 2002 for US$1.5 billion. In 2008, it proposed a policy that would require all transactions to occur over PayPal; however, this was rejected by the ACCC.

PayPal credit or debit card payments incur a charge of $0.30 plus between 1.1 and 2.4 percent of each transaction, in addition to withdrawal and international transaction charges.

 
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