Watchdog awaits eBay's response over PayPal deal

The ACCC has given eBay until 23 May to respond to concerns over its proposed exclusivity deal with its online payment arm PayPal.

The ACCC has given eBay until 23 May to respond to concerns over its proposed exclusivity deal with its online payment arm PayPal.

The online auction site notified the Australian Competition and Consumer Commission (ACCC) in April that it intended to enter into an exclusivity deal with PayPal, omitting most other payment methods for customers from 17 June, prompting the regulator to issue a call for submissions from the public and industry on the proposed move.

Although the official deadline for submissions passed last week, the ACCC is still allowing interested parties to lodge statements via its Web site, with the Australian Bankers Association (ABA) becoming the latest in a series of high-profile organisations — including the Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC) — to register its concern with the regulator after lodging its submission yesterday.

According to the ABA, the move will limit the choice of eBay buyers and sellers alike "without justification for doing so", and goes on to urge the ACCC to revoke eBay's notification and disallow any exclusivity arrangement with PayPal.

"You have to break PayPal into two components," said Simon Warner, CEO of Web transaction company Centricom, which submitted its own statement to ACCC this week.

"It's a service facilitating payments on eBay, but it's also a service sold directly to other merchants, we [Centricom] believe that if they [PayPal] attain an exclusivity deal with eBay, they'll use it as a bench head in Australia and further restrict consumer choice," he said.

An ACCC spokesperson told ZDNet.com.au today that eBay has until 23 May to respond to the submissions pending the watchdog's final decision on the matter.

"I think it's done a lot to spark public debate about online payments in general, particularly as the RBA and ASIC are getting on board ... we just want to make sure competition isn't stifled for Australian consumers," said Centricom CEO Warner.