Australian competition watchdog moves to thwart eBay PayPal move

Australian competition watchdog moves to thwart eBay PayPal move

The Australian Competition and Consumer Commission (ACCC) has moved to scuttle plans by eBay to force customers to use the PayPal service to make payments on its online auction site.

EBay applied to the ACCC for an exemption from the Trade Practices Act in April as part of its plans to stop customers using payments methods such as direct bank deposits, cheques and money orders, on its online auction site.

Since then both The Australian Bankers Association and The Reserve Bank have lodged submissions with the ACCC in an attempt to stop the online auction house from introducing the rule change, which was expected to take effect from next Tuesday.

The ACCC has now issued a draft notice proposing to revoke the notification lodged by eBay, amid "anti-competitive effect" of the proposal.

Graeme Samuel, chairman of the competition watchdog, has released a statement calling on eBay to delay implementation of the plan until the ACCC makes a final decision.

"The ACCC is concerned that the notified conduct will allow eBay to use its market power in the supply of online marketplaces to substantially lessen competition in the market in which PayPal operates," says Samuel. "If the notified conduct is allowed to go ahead, there will be no competition for the supply of such services to buyers and sellers using eBay."

Samuel says the ACCC accepts having PayPal as the only payment provider may offer some benefits to users, such as better buyer protection insurance, but "the ACCC believes that consumers are in the best position to decide which payment method is most suitable for them".

EBay and other parties can lodge submissions in response to the draft before the ACCC decides whether to issue a final notice revoking the notification.

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