eBay PayPal Summoned by RBA

The Reserve Bank of Australia has summoned eBay Australia and PayPal to appear before its Payments System Board which has responsibility for the Bank's payments system policy; to explain why eBay and PayPal should not comply with rules that bind all other payments systems in Australia.

PayPal spokeswoman Kelly Stevens said

“They want to talk to us about surcharging; we don’t have a steering policy and that is in eBay’s area anyway.”

PayPal managing director Andrew Pipolo and eBay vice-president Simon Smith are expected to attend a meeting being scheduled to review alleged anti-competitive behavior. Informed sources say that Pipolo is going to tell the Reserve Bank that PayPal needs more time to grow before being asked to drop its no surcharging rule. This is line of reasoning is unlikely to impress the Payments System Board which is composed of high level banking and finance industry experts, particularly since Pipolo has been bragging "The latest Nielsen report shows that PayPal is now the preferred online payments system, more so than Visa or Mastercard, so our indications are that the PayPal brand is standing up very strongly."

Can't have it both ways Andrew, pick a line and stick to it.

The Reserve Bank, may use its powers to impose an access regime and/or set standards for a particular payment system, it may

* 'designate' a particular payment system as being subject to its regulation. Designation has no other effect; it is simply the first of a number of steps the Bank must take to exercise its powers;
* determine rules for participation in that system, including rules on access for new participants. Since access is inextricably linked to efficiency the Bank works closely with the Australian Competition and Consumer Commission (ACCC);
* set standards for safety and efficiency for that system. These may deal with issues such as technical requirements, procedures, performance benchmarks and pricing;
* direct participants in a designated payment system to comply with a standard or access regime; and
* arbitrate on disputes in that system over matters relating to access, financial safety, competitiveness and systemic risk, if the parties concerned wish.

The RBA's Payment System Reforms as of May 2007 sought to improve efficiency and competition by:

1. more closely aligning the relative prices for different payment services with the relative costs of providing those services;
2. addressing restrictions on merchant behavior that limit competition;
3. liberalising access to payment systems; and
4. improving the transparency of the payments system.

In the Bank’s view, the no-surcharge rule imposed by Mastercard, Visa, American Express and Diners Club limited the ability of merchants to put downward pressure on fees by threatening to charge the customer for using a credit card.

Neither MasterCard nor Visa agreed to voluntarily remove their no-surcharge rules for credit cards and, as a result, the Bank imposed Standards requiring the removal of these rules. In contrast, American Express and Diners Club voluntarily agreed to remove their equivalent rules.

The PayPal User Agreement for Australia states in Section 6.4 Seller Discouragement Policy.

You agree that PayPal may suspend your account or otherwise prohibit your use of the PayPal service if you display PayPal as an accepted payment method on your website or eBay listing and subsequently prohibit the use of PayPal, surcharge for the use of PayPal, or otherwise discourage the use of PayPal as a payment mechanism.

The no-steering rule prevented merchants that accepted American Express cards from encouraging customers to use another method of payment (equivalent rules did not exist in the MasterCard, Visa and Diners Club schemes). Again, the Bank saw this rule as inappropriately restricting competition and, after discussions, American Express agreed to remove the rule.

eBay's Accepted Payments Policy for Australia states

It is a condition of eBay supplying the services at the Site that eBay requires all sellers to offer payments through PayPal (with some exceptions set out in the Policy below).

Robert Vandermeer, is a spokesman for The Group, a coalition of eBay users who are opposed to eBay's repeated attempts to force PayPal on buyers and sellers in Australia. He said

After ebay's humiliating defeat in June, when the ACCC moved to block ebay's attempts to make PayPal the only payment option, this next round of discussions with the RBA appears likely to deliver a debilitating blow to ebay's efforts to force PayPal on Australian consumers.

A link to the letter which prompted the RBA to act is appended.

Henrietta says "Attempting to browbeat Aussies is not wise"



Y'all come back






Related Articles & Useful Links:

Reserve Bank of Australia Media Release August 20th 2006

Not A Smooth Move eBay in Australia!

Do you know that Chinese curse that goes "May you live in interesting times..."? There are certainly 'interesting times' for eBay in Australia.

Once in a while I do love to say "I told you so", so juvenile and so infinitely satisfying! When this whole PayPal Only in Australia debacle started I said that Australia may be a country with a small population but that Australians are a tough people and do not take kindly to being pushed around.

Hoo boy!

I am so glad I am on the side of light. I can't imagine anything closer to Hell than having a bunch of Aussies with blood in their eyes after me. eBay may think that they have gotten what they wanted. In reality what they have is the first stages of an unholy nightmare.

Australian sellers made a record breaking number of submissions to the Australian Competition and Consumer Commission in the matter of eBay's request for a waiver from the Trade Practices Act 1974. After a lot of bluster eBay withdrew their application. First round to the sellers I believe.

Many Australian sellers believe Stage one was merely a smokescreen for Ebay to sidestep themselves into the position they wanted in the first place. Mandatory PayPal on every listing, mysterious glitches to lower alternative methods of payments visibility and penalties for any seller who expresses a preference in payment methods. Ask for the moon and settle for a handful of stars.


Not content with their round one victory Australian sellers are now carrying the fight to eBay.

No more hiding behind "we are just a venue" whenever the going gets tough. If eBay thought that Australia was a soft target for sweeping global change we are determined to prove to a watching world just how wrong eBay is.

Their goals:
1. PayPal will not be a mandated option,
2. eBay/PayPal will have to become a party to the EFT code of conduct, and,
3. both will be obliged to respect all of the consumer laws of the country.

Letters are being written to The Hon Chris Bowen MP, Minister for Competition Policy and Consumer Affairs, and individual Members of Parliament as well as the various Ministers for Consumer Affairs, Fair Trading, Attorneys-General, Justice and Workplace relations in all states and territories of Australia including at the Federal level.

Many US sellers feel that eBay has declared war on the small seller. Australian sellers appear to have declared war on eBay. I hope Simon Smith has a tin hat.

Y'all come back!

Then eBay . . . Blinked

eBay Australia has announced that it is withdrawing its application for a waiver from the Trade Practices Act 1974. eBay has apparently realized that despite all the bluster, threats and arrogant statements, in Australia the law is the law and it applies to eBay too.

It is my opinion that eBay is concerned that the current accepted payments policy

eBay requires all sellers to offer PayPal as a payment choice on eBay.com.au along with other permitted payment methods of their choosing.

together with the Misleading and Discouraging Payments Policy might be ruled contrary to the Act and is hoping to avert this unintended consequence by withdrawal.

On calling the ACCC Thursday afternuoon (their time) I was informed that anyone can file a complaint and that the ACCC will investigate. The ACCC has the power to prosecute when it finds violations. The complaint form is here

Any complaint should reference:
1. eBay supplies services (listings) on condition that the purchaser (eBay seller) buy financial services from a third party (PayPal) and refuses to allow listings if the seller will not agree to that condition.
2.This appears to be third line forcing contrary to Section 47 of the Trade Practices Act 1974

eBay originally stated that the PayPal only in Australia Plan would be implemented in two stages. From their notification:

Specifically, under the Project it is proposed that:
(1) effective on and from 21 May 2008, eBay will amend its User Agreement and alter 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;

Here is the definition of third line forcing from Section 47 of the Act:

Third line forcing is a specific form of exclusive dealing prohibited outright by the Trade Practices Act. It is not subject to the substantial lessening of competition test. It involves the supply of goods or services on condition that the purchaser buys goods or services from a particular third party, or a refusal to supply because the purchaser will not agree to that condition.

What do you think?


Y'all come back

PayPal Nightmare Read Your Agreement

This video is over a year old but it is just as pertinent now as it was then. This will be included in my submission to the ACCC. That fight is not over yet.

There are a lot of changes to the PayPal User Agreement and they are not in your favor.

Check back later this evening for my take on PayPal's take.





Y'all come back

ACCC Just Doesn't Understand eBay

eBay has released a media statement regarding the ACCC’s draft notice. All the right 'button' words are present, poor Usher must have been up all night polishing. I am not sure what is meant by

eBay intends to work with the ACCC

It sounds sinister. Perhaps we should have a whip round to get tin hats for all the commissioners just to be on the safe side.

The statement reads as follows:


ACCC draft notice undermines online consumer protection
eBay will continue to fight for safety benefits for consumers

eBay challenges yesterday’s Australian Competition and Consumer Commission’s (ACCC) draft notice and is disappointed that the ACCC’s current view delays the opportunity to provide consumers a more secure way to shop on eBay.com.au with confidence.

eBay intends to work with the ACCC and hopes to achieve a final outcome which has the safety and security of eBay’s members as its paramount objective. eBay will delay the removal of other payment methods from the site until Tuesday 15 July.

PayPal offers consumers a range of payment choices, including bank transfer and credit cards. It’s a safer and easier online payment system that significantly enhances protection for eBay buyers and sellers.

eBay is pleased to confirm that PayPal buyer protection will jump to $20,000 on eBay.com.au for purchases paid for using PayPal from Tuesday 17 June.

eBay believes the consumer benefits of this initiative are worth fighting for on behalf of its buyers which will ultimately benefit sellers.


What does this mean for you?

PayPal Buyer Protection will still increase to $20,000 on 17 June 2008.

From 15 July 2008, the only payment methods sellers may offer on eBay.com.au will be PayPal and pay on pick up.

Selling on eBay.com.au
Current policies regarding accepted payment methods do still apply. This means PayPal is required on all listings on eBay.com.au. Other payment methods (i.e. bank deposit, cheque/money order) may also be offered until 15 July 2008.

As previously communicated any listings that do not comply with eBay’s Accepted Payments Policy will be removed.

There are a small number of categories excluded from these changes. Learn more about these exclusions.

Buying on eBay.com.au
To ensure you benefit from PayPal’s Buyer Protection Policy, eBay strongly recommends you use PayPal when paying for your purchases on eBay.com.au.

From 15 July 2008 the available payment methods will be limited to PayPal, Visa/MasterCard, or pay on pick up.

Please note that some of our onsite communications will still refer to changes taking place on 17 June 2008.
These communications are being updated and should reflect the new date of 15 July 2008 within the coming days.

Regards

The eBay team

Talk about lay it on with a trowel. Have a nice juicy raspberry eBay.


Y'all come back

NO! To PayPal Only in Australia!

With just a few words, well, 42 pages actually, the ACCC has denied eBay's proposed PayPal Only in Australia Plan.

The ACCC considers that the notified conduct has, or is likely to have, the effect of substantially lessening competition in the market in which PayPal operates. The ACCC also considers that the notified conduct is likely to result in reduced choice for consumers, higher transactions costs and reduced innovation in online payment systems.

Therefore, the ACCC concludes that the substantial anti-competitive detriments outweigh any public benefits resulting from the notified conduct.

For the reasons identified above the ACCC considers that the notified conduct has the purpose, effect or likely effect of substantially lessening competition and the benefits do not outweigh the detriments.

Accordingly, the ACCC proposes to issue a notice to revoke notification N93365 lodged by eBay International A.G. on 11 April 2008.

Shot down in Flames!

Don't MESS with Aussies eBay.




Y'all come back



Update: The photo is from the 1990 inundation of the village of Kalapana on the Big Island of Hawaii. Ua mau i ka mâlie o Kalapana

What Have We Gained From The eBay Boycott?

There are two comments on my post yesterday, both from eBay sellers who think the eBay boycott has been unproductive. I respectfully disagree.

The initial boycott which ran from February 18th through February 25th was not expected to result in an immediate reversal of eBay's plans. Far from it! We are realists and know from past experience that communicating with eBay is generally one way. We speak, they ignore. The first boycott was intended to let eBay know that they were about to step over the line. Did we achieve that? Yes. Did eBay believe we meant it? No.

The First Gain was Publicity
Because there was a lot of media attention eBay was forced to respond. The response was predictable, exactly like the parent who's four year old child announces they are going to run away from home. This condescending dismissal galvanized already angry sellers, gaining more negative publicity for eBay.

Then came Networking
From publicity came momentum. More eBay sellers became aware of what was going to happen, were angered by it and joined. In turn they generated more publicity. Groups formed, off the censored eBay boards and networked. Boycott eBay on Delphi was and is probably the most active. One of the benefits of networking was that many alternative venues were found and discussed. Sellers created support threads to help each other with the ins and out of learning new venues, setting up Google Checkout etc. This encouraged sellers to branch out, which led directly to the rapid growth of OnlineAuction.com and eCrater, which together with iOffer were voted as having the best prospects of becoming a viable alternative venue. Etsy registered their 1,000,000th user today one week short of their third birthday.

International Solidarity
The power of networking brought us in contact with sellers from Australia, Germany, Italy, France, Spain and the UK. This is amazing. For example US sellers made submissions to the ACCC in Australia so that the ACCC would know that eBay's claims were not universally accepted and that PayPal was problematic in the USA too.

We Prepared & Learned
We learned that we did not ever want to allow another site to achieve the kind of power that WE gave eBay. Other smaller sites than the four mentioned above, also saw growth because sellers quickly realized that there is no 'one site fits all'. We prepared for what we knew was coming in May and that two month hiatus between the initial one week boycott and the May 1st beginning of an open ended boycott gave us time to make a smooth transition with minimal damage.

I personally know one PowerSeller, a good man who is the epitome of anti-boycott and 'nothing will happen to good sellers' sentiment, he has never had a neutral or negative. He made the mistake of believing that eBay was run like a business; that mistake has effectively put him out of business.



Y'all come back

Woohoo I won!

On Tuesday Ina Steiner over at Auctionbytes Blog posted on a Mysterious ACCC Filing in the eBay PayPal Only for Australia Waiver application. Ina has a way of making things fun and she invited readers to play 'whodunit" in the comments. My comment was #11.
Today's update will be of interest to my readers.

Lets hear a round of applause for Master Detective David Bromage!

I was going to post an exhaustive analysis of this excellent document,
but,
that is going to have to wait until it comes back, if it does.




Y'all come back and be sure to click VICTORIOUSLY on any interesting links in the sidebar!

BaySpeak on PayPal in the Land of OZ

I HOPE the ACCC is a lot smarter than eBay and Paypal's lawyers in Australia think they are! Reading their final submission on their application for a waiver to certain provisions of the Trade Practice Act 1974, produces as fine an example of BaySpeak, half truths, diversions and plain prevarication as I have ever seen, and I have seen a lot.

Half Truth:

excluding Google Checkout, which, contrary to BPAY's submission, does not operate in Australia

Actually, Google Checkout does operate in Australia. Google Checkout is available to buyers in Australia. Google says "We're working towards making Google Checkout more widely available in the near future. At this time, however, we cannot provide any details regarding when Google Checkout will be available in specific countries." Therefore eBay's statement is half true, the system is not available to Australian Sellers.

eBay loves it's sellers!

It is not possible for eBay to achieve the stated objective of significantly reducing "bad buyer experiences" for all eBay users without mandating the use of PayPal ... One likely contributing cause for this is that a number of negative incidents are caused by fraudulent or otherwise dishonest sellers. Such sellers are unlikely to accept PayPal payments because of the security and fraud protection measures available to PayPal users on eBay and, in particular, the ability of PayPal to reverse payments and freeze accounts. It follows that any increased usage of PayPal can be expected to reduce the total number of such incidents.

eBay considers that many of the submissions contain factual errors or distortions and the ACCC may be assisted by eBay clarifying those errors. Accordingly, eBay has identified a number of the most frequently asserted factual errors issues and addresses these issues below.

Just a few:

PayPal is not subject to the same level of regulation as banks.
While not subject to the same regime as banks, PayPal is subject to comprehensive regulatory oversight by government agencies. It is the holder of Australian Financial Services Licence No. 304962 and a banking license. It is subject to regulation by the Australian Securities and Investment Commission and the Australian Prudential Regulatory Authority. PayPal is also subject to the Australian Anti-Money
Laundering, Counter-Terrorism Financing and various other Australian and foreign laws.
Translation: well no it is not, but we can cite a whole heap of regs we are subject to

As a result of the Project, PayPal will become a monopoly provider of payments services for eBay transactions.
This is factually incorrect. PayPal will not become the only provider on eBay - EFT and CC will continue in use, the only difference being the imposition of PP as the intermediary to process transactions. PayPal will continue to pay the credit card merchant fees that would otherwise be imposed on sellers
Translation: No no, not a monopoly, we will just be the only payment method and we are telling you how we pay all fees for something most sellers do not use, without mentioning that we will charge the sellers even higher fees for something they get very inexpensively if not free from their banks.

Y'all come back and be sure to click VICTORIOUSLY on any interesting links in the sidebar!

Deceptive & Misleading Business As Usual eBay/ PayPal

UPDATE to Pants on Fire?:

IT has been pointed out that the eBay market research questionnaire wording:

"PayPal(or) Credit Card or Debit Card payments made directly to the seller's Merchant Account (Sellers will need to acquire a Merchant Account from a bank or other provider)"

is NOT the same Paypal only policy as is currently proposed in Australia.

Sellers have the option of a higher cost Merchant Account & PayPal pricing would be precisely calculated to be cheaper. (There is an example in the Ads on the right, click through to pricing.) This is de facto monopolization and inhibition of competition with the potential for price fixing as has been noted in submissions to the ACCC in Australia.

I am surprised that Google Inc has not taken steps to defend their superior Google Checkout service from eBay's specific written classification as an unsafe and inconvenient payment option.

Another example of what eBay has become. This corporation is the epitome of 'do as I say not as I do'. This is the venue that unabashedly insists the sellers terms of service are irrelevant if a buyer, after accepting them, chooses to unilaterally void any part of what is a legally enforcible contract. eBay's penchant for deceptive and misleading statements is directly responsible for record low levels in seller listings. eBay's continuous stream of negative and disparaging public statements implying a need to protect buyers from unscrupulous and fraudulent sellers has predictably resulted in loss of buyer confidence.

Sellers are moving their listings to alternative venues in increasing numbers and many are simply going out of business while eBay executives continue to harvest vast personal fortunes from soil that is no longer fertile in an unhealthy economic climate.

There is a conflict between 'eBay is only a venue' and eBay dictating business policy for the sellers. It is only a matter of time before that dichotomy is challenged in court.

Y'all come back and be sure to click VICTORIOUSLY on any interesting links in the sidebar! Gotta keep me in tea bags!

Rumbles Down Under

At a public meeting for sellers held in Melbourne May 6th, the first in a series of four forums, eBay Australia VP Simon Smith compared people who don't want to use PayPal to drug addicts. The meeting was attended by several hundred sellers. APC journalist Angus Kidman was there and wrote this excellent article.

Picture courtesy of Opal Hut where you will find beautiful polished opal nuggets straight from the source.

Australia has strong consumer protection laws enforced by the Australian Competition and Consumer Commission (ACCC). EBay has applied to the ACCC for an exemption from the Trade Practices Act as it prepares to stop vendors using other payment methods, such as direct bank deposits, checks and money orders, on its online auction site.

eBay insists its move is designed to increase security but eBay Australia's trust and safety director, Alastair MacGibbon may have let the biggest cat out of the bag when he revealed the most common complaint it dealt with was regarding goods that did not arrive as expected, or did not arrive at all.

"Most disputes we see on the site aren't related to fraud at all, most disputes are actually a misalignment of expectations,"

Interestingly, Philip Druce managing director of rival venue Oztion disputes eBay's claim that direct deposit transactions are four times more likely to end in a dispute.

I would say that is very high. Our stats show that 79 per cent of transactions use direct deposit," he said. Out of those a tiny 0.4 per cent actually end up in a dispute, but out of them, 80 per cent are resolved.

At one stage, Simon Smith claimed the eBay figures had been verified by KPMG, but later retracted his comment after a quiet word from an eBay lawyer.

eBay Inc. CEO John Donohoe has stated if successful in Australia, eBay(Stock quote) will introduce the same rules across its global sites. In June 2006 eBay added (Stock quote) Google Checkout - the rival Internet payment service from the Web search giant - to the prohibited payments list.

According to local press reports, The Australian Bankers Association and The Reserve Bank are lodging submissions with the ACCC in an attempt to stop the online auction house from introducing the rule change on 18 June.

May 7th is the date changes to Paypal's TOS take effect, allowing Paypal to freeze an account if they think you might be in violation. Scary, when you remember what they did before when they allegedly had to have proof you were up to something.

Y'all come back and be sure to click VICTORIOUSLY on any interesting links in the sidebar!

More Bayspeak 'PeePee' in Australia

Safety and convenience are at the core of eBay’s policies toward payments. This policy is designed to promote safe online shopping, and to encourage online payment methods that are safer, easier to use, and offer high levels of protection for users

. . .Now let's get real!

Every transaction that does not pass through PayPal is a lost revenue opportunity for eBay. This is why in the USA Google Checkout is on the list of unsafe payment processing systems.

Australia has always had zero cost payment options that are not available in the USA. Most Sellers prefer to use bank transfer, where the invoice is paid direct into the seller's bank account from the buyer's account. This is obviously not acceptable to eBay Australia.

eBay has announced effective May 21st, 2008 all items listed for sale on eBay.com.au must offer PayPal as one of the payment methods. All items appearing on eBay.com.au as of 17th June 2008 must be paid for using one of the following:

1. PayPal
2. Pay on pick up (i.e. paid for when picking up the item)
3. Visa/MasterCard (with transactions processed by PayPal).

No other payment methods will be permitted.

Not much room for argument there. There are a few listed exclusions. I wrote about Bayspeak on this subject here

Unfortunately for eBay, Australians are a tough lot and do not take kindly to being shoved around. Equally unfortunately for eBay, Australia has strong consumer protection laws and an active enforcement arm, the Australian Competition and Consumer Commission (ACCC) which has regulatory powers.

I submitted comments to the Commission which you can read here, please feel free to cut and paste if you wish to comment yourself. There is at least one error in my submission, I wrote that eBay owned BidPay and should have said BillPoint, (although BidPay was one of the few non PayPal payment options permitted on eBay).

I believe the commission should hear any verifiable horror stories about PayPal. Submissions should be emailed by April 29th because of the time difference to : Lauren Roy, Adjudication
adjudication@accc.gov.au
Subject line: eBay International A.G. Notification N93365

Here is a video promoting Oztion.com, thats Australian for auction, rapidly becoming a viable alternative to eBay.



A few snippits off the Australian boards, eBay is apparently hiding Sellers bank transfer information, it must be a glitch because the PayPal payment information is showing up:

Don't get rattled here, I just email the seller and they provide the bank info personally for me. Not worth getting your knickers in a knot here, eBay is just pulling desperate bunnies out of the proverbial hat in a last resort to get you to use PeePee.
Chin up, pack up and head for the other site

. . .

Jeez ebay really are paranoid aren't they! Getting all worked up about someone posting their Ph number which is publicly listed anyway! Especially one they never answer any way! What a bunch of knob jockeys they are!
Hmmmmn! Seeing as how the listed number and the listed fax number are sequential numbers I wonder if one was to dial further numbers in that sequence whether one would actually get to talk to a real person at ebay?
Nah!!!!! Silly me of course the are no real people at ebay only Simon Smith, not what I or anyone else here would consider human and his trained gibbon!

Next post . . . Monday . . . Y'all come back and be sure to click VICTORIOUSLY on any interesting links in the sidebar!