eBay fails bid for immunity for its new ‘protection’ plans

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The ACCC has rejected the plans for immunity from eBay Australia to reduce the payment options to either its PayPal service or Cash on Delivery, arguing that forcing users to use the eBay-owned service will reduce competition.

The ACCC asked the Australian public to give submissions on their thought of eBay’s new plan. It received over 700 individuals submissions, arguing that eBay was ‘double-dipping’ with eBay’s fees on auctions and the PayPal transaction fee.

One of the submissions that was noted by the ACCC was made by BPAY, and showed that eBay would raise its fees by 45.7%. Other submissions noted by the report was from the Australian Payments Clearing Association.

The ACCC’s conclusion state that : "The ACCC considers that the notified conduct has, or is likely to have, the effect of substantially lessening competition in the market in which PayPal operates. The ACCC also considers that the notified conduct is likely to result in reduced choice for consumers, higher transactions costs and reduced innovation in online payment systems. Therefore, the ACCC concludes that the substantial anti-competitive detriments outweigh any public benefits resulting from the notified conduct. Accordingly, the ACCC proposes to issue a notice to revoke notification N93365 lodged by eBay International A.G. on 11 April 2008."

In translation: This means that eBay cannot start its plans for reducing the payment options unless it finds evidence that would exonerate itself before the deadline of the 26th June. Also, if they decide to push ahead with the plans, they would be prosecuted for anticompetitive conduct.

We want to hear on what you think about the plans made by eBay and your thoughts of the ACCC’s response.