Fran Foo | July 08, 2008
EBAY Australia is still under the competition watchdog's microscope despite last week's decision by the online auction giant to drop its case for PayPal exclusivity.
EBay flagged plans in April for a two-stage website revamp: on May 21, a new rule would make PayPal mandatory on all sales listings and, on June 17, all other forms of payment would be banned bar PayPal and cash on delivery.
Public debate largely focused on the latter component, which also drew the ire of the Reserve Bank, the Australian Bankers' Association, Google and the Australian Securities and Investments Commission.
The proposal was largely viewed as anti-competitive by the banks and eBay sellers.
However, the first component went under the radar and was widely assumed to be approved by the Australian Competition and Consumer Commission.
Many eBay members have cried foul and requested the competition regulator to stop the practice and the ACCC says the auction giant is still in its sights.
"Given that eBay and PayPal are related companies, eBay requirements that traders make available PayPal among the payment choices offered is, in itself, unlikely to raise exclusive dealing concerns," ACCC spokeswoman Lin Enright said.
"We would, however, be concerned over any misrepresentations made in relation to the requirement for PayPal and other conduct that might restrain traders' ability to offer other payment methods.
"The ACCC is aware of concerns being raised about current conduct of eBay and is considering these carefully," Ms Enright said. "Should the ACCC form concerns over the conduct it will not hesitate to pursue these with eBay."
One of the criticisms levelled against eBay is the prominent placement of the PayPal logo.
EBay members have complained to the ACCC that during the checkout phase buyers are presented with a large PayPal logo while other payment methods are buried at the end of the page. This gave the impression that PayPal was the only payment method.
EBay said the ACCC was on the wrong track. "EBay is not restraining traders' ability to offer existing payment methods," company spokeswoman Inessa Jackson said.
"If a seller chooses to offer other payment methods, these are displayed alongside PayPal on their item page in the payment options section.
"EBay promotes the use of PayPal to buyers because of its security benefits."
Some critics said eBay was the ultimate winner - despite backing down from the PayPal-only policy, it had forced all sellers to offer PayPal more than a month ago.
EBay Australia chief Simon Smith denied it had created a smokescreen to dupe the ACCC and eBay members.
"We've been upfront from day one about our proposals. We've always said this is for the sake of better, stronger security," Mr Smith said.
About three months ago law firm Deacons, representing eBay, filed an exclusive dealing notification with the ACCC requesting legal immunity from the Trade Practices Act.
Section 47 of the Trade Practices Act prohibits exclusive dealing, which broadly involves one trader imposing restrictions on another's freedom to choose with whom, in what or where it deals.
In some cases, exclusive dealing is prohibited outright and in other cases only where it substantially lessens competition.
The ACCC then asked for feedback from interested parties and was staggered by the response.
The 700-odd submissions were the highest number ever received for an exclusive dealing notification, Ms Enright said.
In mid-June the ACCC issued a draft notice revoking eBay's immunity.
Despite the setback eBay says it has no plans to terminate Deacons' services.
Meanwhile local eBay alternatives Oztion and Trading Post have recorded gains since the PayPal saga began.
In the last quarter, said Oztion general manager Philip Druce, new listings had jumped 58 per cent and the site had a 167 per cent spike in new sellers.
"This is a recent of eBay trying to force people to payment methods that they don't want," Mr Druce said.
"We don't do that. We offer users choice."
Trading Post spokeswoman Lucinda Tippet said registrations on the website had increased by almost 30 per cent since it unveiled its auctions feature in May.
"The total figure of registrations on Trading Post is currently about 450,000 and has increased consistently since the launch of auctions," she said.