EBAY AND PAYPAL – A MONOPOLY?
Jul 5th, 2008 by Sally
Everyone knows that eBay owns Paypal. Remember back to the time when AT&T owned everything that had to do with phones? Phone problems, call AT&T. Want a green phone? Call AT&T. Finally AT&T was declared a monopoly and the company broken up into several venues. Phone manufacturing, Phone installation, etc. You see, AT&T declared that if they allowed someone else to make phones and they installed them and the phone didn’t work – what would happen? The customer would be without phone service. And, of course they – AT&T – would protect us from this ever happening. That is a monopoly. It becomes empowered by instilling fear of loss in the eyes of it’s customers.
Several months ago, eBay decided to tell eBay Australia that all purchases made on eBay had to be paid for through PayPal. eBay claimed it was upgrading it’s security. Making sure Aussie’s got what they paid for. What would happen if you got a money order? The buyer could be cheated without PayPal.
The Australian Competition and Consumer Commission (ACCC) sent a letter to eBay strongly advising them to drop their requirements. EBay, like a sinking swimmer, whined that the ACCC was undermining consumer rights. That spin didn’t work either. This week, eBay announced that it was dropping it’s requirements that purchases had to be paid through PayPal.
The site’s VP, Simon Smith noted, “While we disagree with the ACCC’s draft notice, we have decided to withdraw the notification to stop any further confusion and disruption among the Ebay community”. By ‘disruption’ we assume Smith means Aussie’s boycotting and moving over to competitors.
Now, what just happened? Why did PayPal choose Australia to make such a demand? Why not Germany? And for that matter, why not the United States.
The difference is simple. Australians do not run to court and file lawsuits. They approach a commission like the ACCC and ask that a rule be reviewed. Thus, no legal ramifications, like a $61M settlement fee as seen in a recent French court against eBay.
In the United States, there is a double whammy. The federal government could review the ruling and determine that eBay and PayPal are a monopoly and buyers should not be restricted from paying by other means. Also, imagine how many sellers could sue eBay for “lost sales” during this time. EBay could literally have thousands of private suits and class action suits brought against it.
Experiential Learning from this article:
So, for those of you who were worried that eBay will make this a requirement for eBay US – forget it. The issue is dead.
