Paymate Lodges Complaint with ACCC about eBay 

11 July 2008

Continuing its campaign against eBay's restrictive trade practices, Australian online payments company Paymate has lodged  a formal complaint with the ACCC.

Effective on and from 21 May 2008, eBay amended its User Agreement and altered the functionality of the eBay Site such that all sellers (including both new and existing sellers) will be required to offer PayPal as one of their accepted payment methods.

Paymate was invited by the ACCC, as a direct competitor to PayPal, to make a submission on eBay's conduct.

Paymate submitted that eBay, in both Australia & New Zealand, is engaging in conduct in breach of s 47 of the Trade Practices Act 1974 (TPA) because the conduct amounts to anticompetitive exclusive dealing, and that further by its representations it is also engaging in misleading and/or deceptive conduct in breach of s 52 of the TPA.

Paymate went on to say that the eBay proposal significantly restricts the ability of Paymate or other payment options to be adopted because eBay:

• mandates PayPal for sellers;
• requires that sellers not express a preference for any particular method;
• promotes PayPal aggressively to buyers to imply it is the 'default' method;
• provides no or little information about alternative methods for assessment by buyers and sellers.

Paymate also strongly objected to the inference in eBay’s publicity to the effect that its method of operations provides the kind of safety and risk free environment that would not be available by utilising other payment methods such as those offered by Paymate. This is misleading and/or deceptive in breach of s 52 of the TPA.

Paymate submitted that the decision the ACCC should take is to ask eBay to immediately cease its conduct or face prosecution by the ACCC in the Federal Court.  In addition, they recommended the ACCC ask eBay to:

• make available factual information on all accepted payment methods to both buyers and sellers on an ‘equal footing’ basis;

• communicate the changes to policy and information on all payment methods clearly and prominently on the eBay website as well as via email communications, to at least the same extent as the Notified Conduct was communicated.

 Dilip Rao, Managing Director of Paymate, who has consistently asked for a 'fair go' for Paymate, said, "I hope the ACCC and eBay will see the sense in our submission, which helps eBay meet its goal of reducing 'bad buyer experiences' while giving buyers and sellers a free choice of payment method.  We can surely trust Australians to make a sensible choice, balancing risks and costs, if they are given reasonable information onall payment options online."

Asked about the promotional offer from Paymate to eBay members, Mr Rao said he was delighted to extend the offer indefinitely to give all eBayers a chance to 'experience the difference'.  Paymate is waiving buyer fees on all eBay transactions under this special offer.

Click here for the formal complaint lodged by Paymate with the ACCC.

Click here for media mentions about Paymate, including articles on this matter.