Economy

Opposition to eBay PayPal decision grows

SmartCompany /

Opposition to eBay’s PayPal-only plans is mounting, with Australian sellers planning to confront eBay global marketplace operations president Lorrie Norrington at a conference in New Orleans this week.

The Professional eBay Sellers Alliance, a group of eBay power sellers, is reportedly leading the fight.

Paul Greenberg, a former top seller on eBay and now a co-founder of online retailer Deals Direct, says the current controversy reflects problems in the eBay business model.

“If we see it from eBay’s perspective, there is a problem with fraud and eBay have been upfront about that,” Greenberg says.

He says that as a user-generated business, where many people are transacting with many others, it is very hard for eBay to control the quality.

eBay has argued that requiring eBay users to transact through the eBay-owned PayPal or pay cash on delivery, only is a measure to create a more secure environment for buyers and sellers to trade.

Greenberg says eBay started as a site for collectors to trade and created a community of interest. There was a sense of collegiality and loyalty. He speculates that the fraud problems have arisen because there is an increasing amount of new goods being sold through eBay.

By contrast to many online retailers that can guarantee customer service and fulfillment of orders within a certain time period, eBay can’t do that. It is a just a portal for buyers and sellers.

“They have to decide what business they are in,” says Greenberg.

The elite sellers of the Professional eBay Sellers Alliance, who generate more than $US400 million ($424.88 million) in sales each year on eBay, are angry about eBay’s decision.

“The US board has agreed that the actions of eBay Australia are unacceptable,” PESA Australia president Phil Leahy told The Australian newspaper. “It places too much cost on eBay sellers and doesn’t give choice to buyers. We understand that eBay America was more than likely behind this.”

eBay is waiting to hear from the ACCC whether it’s plan is anti-competitive and would breach the Trade Practices Act. The ACCC is accepting submissions until 2 May.

If the plan is allowed, it could set a worldwide precedent.

 

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