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eBay told to stop forcing Aussies to use PayPal

Temporary suspension on competition grounds

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The Australian Competition and Consumer Commission has told eBay to stop plans to force Aussie buyers to use PayPal.

The move, which would do wonders for eBay's margins, was deeply unpopular with some eBay regulars but was expected go worldwide if successful.

The move to PayPal-only transactions was due to come into force next Tuesday. Aussie eBay sellers have had to offer PayPal as an option since May but from next week it would have been the only payment method accepted.

But ACCC chairman Graeme Samuel said: "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."

Samuel said: "The ACCC acknowledges that having PayPal as the only payment provider has the potential to deliver some benefits to users, such as increased buyer protection insurance in certain circumstances. However, the ACCC believes that consumers are in the best position to decide which payment method is most suitable for them.

"The notified conduct denies them that choice. Accordingly, the ACCC considers that these benefits do not outweigh the anti-competitive effects of the conduct."

Because of these worries the ACCC asked eBay to suspend introduction of the PayPal only provisions until it had made a full decision.

eBay and other parties can now make submissions to the ACCC before it releases its final notice. eBay Australia was immune from prosecution for the changes because it notified the ACCC - that has now been suspended.

The ACCC received hundreds of complaints about the planned change, including one from Google.

The draft notice is here. ®

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