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Monday, July 07, 2008

eBay backs down on PayPal changes

Slashdot It! eBay has backed down on plans to force all of its users on to PayPal just as the competition regulator looked set to scuttle the move. The policy would have locked out all payment methods - direct bank deposits, cheques and money orders - except PayPal, which eBay owns, and cash on delivery/pick-up. eBay's proposals inspired a massive backlash among sellers, who would have been slugged with extra fees because PayPal charges them for each transaction. Sellers complained eBay users should be given the choice of which payment method to use, rejecting eBay's claims that the decision was purely to protect users from fraud. The Australian Competition and Consumer Commission, which held a conference in Sydney this week to help it decide whether to allow the policy, looked set to scuttle the plan on the grounds it would lessen competition in the online payments market and deny consumers choice. But today, before the ACCC could announce its final decision, eBay said it would not go ahead with the plans. "While we disagree with the ACCC's draft notice, we have decided to withdraw the notification to stop any further confusion and disruption among the eBay community," said eBay vice president Simon Smith. "eBay regrets any uncertainty that this process has caused among the Community and believe that today's decision will remove further doubt." However, eBay has refused to roll back the first stage of its proposed changes, which required all sellers to at least offer PayPal as one of the payment options. "Forcing sellers to accept PayPal payments will harm competition by making it more difficult for PayPal's competitors to compete," said Dale Clapperton, chair of the online users lobby group Electronic Frontiers Australia. "eBay should allow sellers the choice of whether or not to deal with PayPal. Many sellers choose not to use PayPal because of higher fees or past bad experiences. "If PayPal is truly the best payment option, why does eBay need to force people to do business with them?" Get Daily Updates via Email Protect your computer with Windows Onecare

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