eBay sellers launch a second wave of attacks over PayPal

A group of eight eBay sellers has written to Assistant Treasurer Chris Bowen and a host of other federal and state ministers demanding that eBay overturn its decision to force eBay sellers to offer PayPal as a payment option.

A group of eight eBay sellers has written to Assistant Treasurer Chris Bowen and a host of other federal and state ministers demanding that eBay overturn its decision to force eBay sellers to offer PayPal as a payment option.

The letter, published today on IT Wire, outlines how eBay announced earlier this year that it would force all consumers to use PayPal and then applied to the ACCC for immunity from prosecution under the Trade Practices Act. Late last week, eBay withdrew this application after a barrage of criticism from eBay sellers and organisations, including the Reserve Bank and Google.

But the sellers remain angry at the way eBay has forced sellers to offer PayPal as a payment option. “The behaviour of eBay since this last action has been designed to achieve the outcome that they were refused by using the site to make PayPal a defacto PayPal-only payment method,” the letter states.

“To this end they have… made the alternative payment methods as difficult as possible to access; deleted any seller’s listings that state a preferred payment method other than PayPal; has refused to allow sellers to charge the buyer the fee that PayPal charges them (as the Reserve Bank has permitted with credit cards); has deleted items that are in any way critical of PayPal while at the same time telling the buyers that other methods, bank deposit, money orders, credit cards etc, are not safe.”

The sellers also argue that there are questions over PayPal’s safety as the company has refused to sign the electronic funds transfer code of conduct, which is administered by ASIC and sets out the way banks and other financial services must conduct electronic transfers and protect users’ information and privacy.

“eBay’s actions are squeezing too much from the sellers – it is hurting. Their actions are designed to gain through brute strength (‘we own the site and can do whatever we want’) those things that the ACCC wouldn’t allow them to do,” the letter says.

A member of the sellers group, Robert Vandermeer, describes eBay’s decision to dump its plan to force consumers to use PayPal as “good news, but it’s not good enough”.

He stresses he is not personally opposed to PayPal – indeed, he estimates it is the preferred payment method for half of the shoppers at his eBay store – he is particularly concerned that PayPal’s refusal to sign the EFT code means users are missing out on some legal protections. “There’s a principle here that eBay is forcing PayPal on people and they are doing this on the back on an argument that says PayPal is safer, and it’s a blatant lie.”

The ACCC, which has also been approached regarding the concerns of the sellers’ group, has confirmed that it will continue to monitor eBay’s conduct in relation to PayPal.

eBay spokesman Daniel Feiler has defended the company against the allegations that it promotes PayPal to the detriment of other payment methods. He says traders are not restrained in the payment methods they can offer and all payment methods will be advertised next to PayPal on a seller’s site.

But the company does not shy away from promoting PayPal’s security advantages. “eBay does promote PayPal because of its security benefits,” Feiler says. “Our data clearly shows that you are almost four times less likely to enter a dispute if you pay by PayPal than if you pay by bank deposit, credit card or money order.

“It would not be right for us not to make people aware of that fact.”

Feiler also moved to explode the “myth that PayPal is not regulated in Australia”. He points out that while PayPal is not a party to the EFT code, it does have a banking license and is regulated under Australian banking laws. “Anyone with a complaint about the PayPal dispute resolutions process can take it to the banking and financial services ombudsman and have that third party review the case,” he says.

“PayPal standards either meet or exceed the EFT code of conduct. PayPal does have systems in place that should give all Australian users certainty that they are dealing with a body that is regulated.”

Read more on PayPal and online payments