THE Australian consumer watchdog will revoke an eBay plan that would have forced all of its local customers to make payments through its in-house PayPal service.

eBay was top have introduced a mandatory policy under which all local sellers to use PayPal when they listed a product for sale. The eBay policy would have covered virtually every transaction on the giant auction site.

But the Australian Competition and Consumer watchdog has ruled the plan anti-competitive, with ACCC chief Graeme Samuel.

Australia was to have been the first country in the world where the new mandatory system was to have been put in place, but that plan is now blocked.

“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,” Mr Samuel said.

“PayPal currently competes with a range of other providers to supply online payment services to users of online marketplaces. Given eBay's position as Australia's leading online marketplace, the notified conduct will substantially reduce competition to supply online payment services to users of online marketplaces more generally,” he said.

Mr Samuel acknowledged that having PayPal as the only payment provider could deliver some benefits to users, such as improved 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, Mr Samuel said.
The decision is a low for Ebay, which had planned to start its mandatory new PayPal policy this week.

The company has not yet shelved it ambitions, but said it had postponed its introduction while “works with” the ACCC.