eBay backs down, but was that the strategy in the first place?
Monday, July 7th, 2008
Since we reported on eBay’s recent move to force PayPal on all of its online auctions in Australia, you may have heard that eBay has compromised on the second part of its plan to eliminate all competition in the payment systems market.
Faced with the case that was building against the move at the Australian competition watchdog (ACCC), eBay pre-empted a negative response by withdrawing its proposal to eliminate all competition in payment systems.
It was unlikely to go well for eBay at the ACCC as objections flooded in from consumers and bodies like the Australian Federal Reserve Bank, Electronic Frontiers Foundation and others.
Of course, eBay is still forcing everyone to offer PayPal, and I wonder if eBay’s strategy was to distract you from that fact by creating a fuss around the threat to eliminate the competition. eBay can’t seriously have ever believed that they could pull a stunt like that.
Rather than doing their a PayPal business any favours eBay has galvanised dissatisfied users to educate the public on the perils of dealing with the monopoly. It has undoubtedly tarnished the eBay and PayPal brands as well as given competition the best opportunity it has ever had to gain a foothold.
eBay claimed that they should be able to offer PayPal exclusively since they say it is more secure than other payment methods. However, contrary to what eBay’s publicity machine have been pumping out, according to the ACCC (from this artcile by Alex Zaharov-Reutt on ITWire):
5.173 The evidence available does not support the view that PayPal is the most secure method of payment, or offers the best service for all transactions.
Simon Tsang of the Sydney Morning Herald compared eBay’s method of consumer “protection” to organised crime.
We can take this out of the whole eBay + PayPal debacle so far: If you’re operating on the Internet and you’re prepared to walk all over your customers, it will come back to bite you.
Was this whole episode simply smoke and mirrors from eBay to distract you from the fact that they are now forcing you to offer PayPal?
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