eBay's monopoly abuse in Australia

Update: The ACCC page on this can be found here.

eBay has decided to only allow PayPal payments for any buyers or sellers conducting auctions on eBay from the 17th of May 2008.

To me, this decision is against the spirit of Section 47 of the Trade Practices Act and forces eBay customers to lose more of their profit margin (if any) due to the increased fees associated with PayPal transactions.

Under the current structure, sellers have had the option to offer alternate methods of payment. The buyer can then choose which method of payment is preferred. These include (but are not limited to):

  • Direct Deposit
  • Cash
  • Cheque

These methods of payment do not incur any additional fees and are usually the preferred method of payment by most buyers and sellers due to the very low cost involved. This freedom is under threat by eBay's proposal to force all users to abandon the above methods of payment.

Under the proposed structure by eBay, there will be the following mandatory fees involved with every auction.

  • Insertation (Listing) fee
  • Final Value Fee
  • PayPal fee

The PayPal fees can range from 3.4% to 4.4% of the transaction cost (before taking into account the eBay fees). This does not include the fees involved with transferring money from a users PayPal account to their nominated bank account.

As eBay owns PayPal outright, the new fee structure proposal forces users to hand over as much as 12% of the final value of their transaction to eBay International as fees. This effectively means that eBay International is abusing its monopoly to gouge an extra 3-5% from their customers for every transaction.

I would like everyone who has dealt with eBay and agree with me to send a submission to the ACCC outlining why you believe this shouldn't be allowed to happen. Submissions close on May 2nd 2008, so be quick!


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