eBay's PayPal push hits a competition hurdle

June 13, 2008 07:50am

ACCC halts eBay's PayPal plan
Says move could stifle competition

http://www.news.com.au/technology/story/0,25642,23856406-5014108,00.html\

ONLINE auction site eBay has failed in its bid to force it customers to use PayPal - a company it owns - to pay for items on the website.

Last night the ACCC said it proposed to revoke eBay's application to enforce the use of PayPal for all transactions, saying it was a threat to competition.

"The ACCC is concerned eBay (would) use its market power to substantially lessen competition," ACCC chairman Graeme Samuel said.

US-based eBay estimates it has about five million Australian users and contributes $2.6 billion to the domestic economy.

The online auction site announced in April that from June 17 it would no longer allow direct deposits, money orders or personal cheques as payment options.

The controversial change would have left buyers and sellers with two options: cash-on-delivery or payment via the online commerce website PayPal.

The management of eBay said the changes were aimed at improving transaction security.

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A comment:
being forced to use paypal we recently purchased from a supplier ,not related to ebay, who also insisted they only accepted paypal for payment. ebay insists that Paypals security is impregnable, however a few days after using it our credit card was hit with over $3000.00 worth of transactions from a merchant from an overseas location that we never had any previous dealings with or knowledge of their existence, although we cannot say that this was because of a paypal transaction, it does leave a lot to be desired, it is suprising how many Australian companys insist you use paypal for payment when we have our own Australian version called Paymate right here in our own back yard, makes you wonder if these companies are receiving a a kick back from Paypal in some way does it not??