Antitrust Lawsuit Filed against eBay over PayPal, Payments Policies

[j]

Michael Malone filed an antitrust class-action lawsuit against eBay this week under the Sherman Act, alleging eBay "utilizes its nationwide monopoly of the on-line auction market to monopolize the available forms of payment that sellers can use on eBay." eBay controls which payment methods sellers may advertise in their listings, and this year, it eliminated buyer-protection for non-PayPal transactions. eBay owns the PayPal payment service.

The lawsuit alleges that "Sellers who would otherwise accept only money transfers must also accept Payment Card transactions." Some sellers have expressed the desire to use PayPal with the ability to reject PayPal payments funded by credit cards, which they may not do under eBay's current policy.

http://www.auctionbytes.com/cab/abn/y07/m04/i06/s01

http://www.economist.com/finance/dis...ory_id=9122582

 

[skalogre]

Woah... all you legal types, what do you think of the chances he has with this one?

 

[AlanC]

I hope he wins.

 

[Bergdorf Goodwill]

Here's to eBay being bitchslapped as hard as is electronically possible.

 

[EL72]

Resistance is futile. I'm no law-talking guy but I think this is going nowhere.

 

[von Rothbart]

Originally Posted by EL72

Resistance is futile. I'm no law-talking guy but I think this is going nowhere.

May be his lawsuit is propped by Google. I'd like to know which law firm represents him.

 

[Tarmac]

I hate ebay and their fees but I dont see this winning. Ebay is a business and they can do what they want. Paypal got hit with a lawsuit before but they lost that only because they were freezing peoples accounts with no warning. If google checkout were actually a peer to peer payment service, I could easily add it as a payment option just by typing "no paypal please. pay via google at [email protected]". But it isn't. Someone else needs to make another peer to peer payment service. Anyone?

 

[dragon8]

This will probably get settled since it is a class action as most of not all do. The damages could be enormous if Malone wins. Interesting to se what changes it will bring to ebay. Personally i like paypal.

 

[odoreater]

Originally Posted by dragon8

Personally i like paypal.

I'm guessing, as a buyer?

 

[BigHandMan]

Originally Posted by Tarmac

Ebay is a business and they can do what they want.

That's funny... I thought businesses were supposed to abide by the law - such as those opposing monopolies and certain practices associated with them - just like the rest of us do.

 

[robin]

I already hate paypal as a buyer, but I hate antitrust laws even more. If you want to use other payment services, then don't use ebay.

 

[j]

The reason I posted this is that I can't see how ebay's shutting down of auctions that even mention another payment method could be considered anything but anti-competitive behavior, which violates the spirit, if not the actual letter, of the Anti-trust acts we have in this country. Personally, I think ebay is setting themselves up for a major mutiny and crash as soon as a smart competitor comes along.

 

[HalfCanvas]

Without knowing anything more about the complaint, my guess is he's using a theory similar to the government's in the MicroSoft case -- that somehow Ebay is unfairly bundling/promoting Paypal and Ebay to the detriment of other payment services.

If you sell an item on Ebay, you'll see that this claim actually has some merit. A seller has the option of clicking Paypal as a payment option, but there ostensibly is no such option for an alternative online payment service (such as Google Checkout). Instead, you have to manually list that fact, and there will be no direct checkout link for the buyer (an annoyance that will tend to deter some potential buyers from bidding on your auction). Furthermore, buyers can search for items from sellers that accept Paypal. Thus, there is an artificially created economic disincentive for a seller to not use Paypal.

While I don't know whether this is a winning case, it certainly isn't meritless. It will almost certainly settle, but society would be much better off having cases like this go to trial.

 

[Bandwagonesque]

Originally Posted by j

The reason I posted this is that I can't see how ebay's shutting down of auctions that even mention another payment method could be considered anything but anti-competitive behavior, which violates the spirit, if not the actual letter, of the Anti-trust acts we have in this country. Personally, I think ebay is setting themselves up for a major mutiny and crash as soon as a smart competitor comes along.

Like I mentioned before, with Google setting up Google Checkout, I'm sure they're setting up plans for an auction website as well at some point in the future. Competition is good.

 

[BigHandMan]

Originally Posted by robin

I already hate paypal as a buyer, but I hate antitrust laws even more. If you want to use other payment services, then don't use ebay.

To pile on... PayPal definitely sucks. Their fees for sellers are confiscatory. I'm about to stop using it in my eBay auctions and just go with money orders or cashier's checks. It'll slow things down, but I'll pick back up the 2-4% of my sales price. (And I'll stick it to the man

).