Crikey: eBay Australia: Who? Us? Anti-competitive?

Stilgherrian — Fri, 30 May 2008 05:43:07 +0000

[This was me in Crikey yesterday.]

Thank the gods I don’t work for the ACCC! The poor sods have to read 700+ public submissions on eBay Australia’s plan to force sellers to use PayPal — which they own. As Crikey reported, this could breach the “third line forcing” provisions of the Trade Practices Act.

Being a lazy geek rather than a tireless public servant, though, I can skim for juicy tidbits. They reveal a widespread fear of eBay bullying.

Greg Walter, for instance, runs online payment system Qpay. He dismisses eBay’s claims that PayPal is the safest and, wearing my moth-eaten network security hat, I tend to agree. But eBay sellers often fear being cut off if they use PayPal’s competitor: Qpay has just one solitary eBay seller as a customer.

Bully or not, eBay is unquestionably Australia’s biggest online-only marketplace. With almost 6 million customers it dwarfs its nearest competitor Oztion with barely 250,000. New entrants BidSell and eSwap are even tinier.

Oztion saw a 22% rise in numbers following eBay’s PayPal-only announcement — proof, says eBay, that there’s genuine competition. But Philip Leahy of the Professional eBay Sellers Alliance reckons Oztion won’t last. It’s an “eBay clone”, he told the ACCC, and there’s “a belief” that once they get a bigger market share eBay will sue them into oblivion. Paranoia?

Even the Reserve Bank has weighed in. Requiring PayPal could make it harder for new online payment systems to establish themselves, restrict merchants’ ability to negotiate lower fees, and restrict consumer choice. Reading between the lines, the central bank sees its role as ensuring that money flows smoothly through the economy. Delays and fees are friction in the pipes which must be engineered out. Computers and network efficiencies should cause transactions costs to fall. eBay’s plan causes them to rise. Markets FAIL.

eBay’s 15-page response omits mentioning their claimed $2.6 billion contribution to the Australian economy. Instead it’s all harmless little eBay. “eBay transactions comprise only [redacted by ACCC] of all online retail transactions in Australia. Given that online retail transactions themselves represent only a part of the online payments market, eBay’s contribution must necessarily be considerably smaller than that.””

The ACCC’s decision will be known mid-June, just before eBay’s planned 17 June start of the PayPal-only regime.

Stilgherrian blogs at stilgherrian.com and is still trying to sell his old crap on eBay.

Stilgherrian » philip leahy

Crikey: eBay Australia: Who? Us? Anti-competitive?

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