Angus Kidman04 July 2008, 8:48 AM
eBay has officially withdrawn plans to force customers to use PayPal, just as the ACCC was expected to announce eBay was breaking the law by doing so.
eBay has officially withdrawn all further plans to make its online payment system PayPal its sole acceptable payment method, but offering PayPal as one of the payment options remains a requirement and there's no sign of the auction giant apologising for suggesting that its opponents were no better than drug addicts.
The war is now officially over. Having been told by both the regulator and its customers that plans to make PayPal compulsory were unacceptable, greedy, anti-competitive, and just plain stupid, eBay has finally thrown in the towel on plans to make PayPal the only way to pay for eBay auctions in Australia.
eBay's statement acknowledging its backdown — something widely anticipated ever since it removed its target date for changing its current approach — contains the closest we'll ever see to an apology for its greedy and rapacious tactics.
"eBay has withdrawn its notification to the Australian Competition and Consumer Commission (ACCC) about removing other payment methods," it reads. "Instead eBay will continue to allow all existing payment methods on eBay.com.au. We have decided to withdraw the notification to stop any further confusion and disruption among the eBay Community. eBay regrets any uncertainty that this process has caused among the Community and believe that today's decision will remove further doubt."
While that expression of regret is a welcome change from eBay's arrogant approach to date, it falls somewhat short of a real apology for the insults and abuse which eBay officials have thrown at the community ever since the policy was first announced in May. In the most infamous example, eBay VP Simon Smith compared people who opposed the compulsory PayPal approach to drug addicts. Somehow, it's hard to imagine that the current mea culpa is going to make up for that particular piece of sledging, or for eBay's evident pro-competition hypocrisy earlier this week when protesting a fine for allowing the sale of counterfeit Louis Vuitton goods. And the fact that PayPal must be offered as an option on all listings won't please sellers who have found eBay's own service less reliable than anything else on the market, or users like this writer who have found eBay's security management incompetent and inconsistent.
It's still unclear whether eBay genuinely believed it had a case that would convince the ACCC that the security benefits of its plans would outweigh the massive disruption to competition or whether it hoped that no-one would notice. The ACCC was much firmer on that point, suggesting back in June that the plan was unlikely to fly. A public meeting this week only reinforced the point.
Despite the backdown, the change is likely to take some time in being reflected on the eBay site. Having royally messed up previous attempts to put the correct information on its site, we don't expect eBay will do any better at withdrawing the policy. List with care.
Rivals were, unsurprisingly, quick to kick eBay while it was down. Telstra's Sensis Trading Post site, which launched free auction listings during the period while eBay was promoting greed ahead of its seller's needs, flung out a press release even before the news of eBay's backdown was widely distributed. "It has taken hundreds of angry public submissions plus the threat of action from the ACCC for eBay to withdraw its notification at the 11th-hour," Sensis Classifieds acting general manager Elisabet Wreme said. "Businesses that make a living by selling online must surely be questioning their credibility."
Rival payment service Paymate, which faced an effective eBay ban if the policy went ahead, also leapt on its rival's misfortunes, launching a waiver on buyer fees until July 15 to celebrate being allowed as an auction payment method.
So what happens now? With PayPal now a requirement on all listings, even though other methods are allowed, eBay still stands to make a bucket load more cash. On the other hand, the thrashing it has given its own brand may have scared off so many sellers that even a handsome bonus 2.4% commission on every sale won't quite make up for it.
In recent days, eBay has undertaken a blanket advertising campaign with a bargain hunt theme, perhaps hoping to distract customers from the recent debacle. But one lesson hunters learn early is that elephants never forget. We don't expect sellers will either, and we're about to find out if three months of stupidity can destroy a decade of global success.