How ebay trashed its brand for the sake of profits Angus Kidman12 June 2008, 7:17 PM (16 hours 19 minutes ago.)
The ACCC's rejection of
ebay's compulsory PayPal plans is good news for consumers, but
ebay's naked grab for cash has done irrepairable damage to the entire online auction market. As APC reported earlier today, the Australian Competition and Consumer Commission has decreed in a draft ruling that
ebay's plans to make PayPal the only accepted payment scheme in Australia for everything except for personal pickup transactions would be a violation of competition law.
ebay's argument that making PayPal the sole option would reduce fraud was given short shrift by the commission, which argued that consumers were in a better position to judge risk on individual transactions than
ebay's management. While
ebay can appeal the decision, with only five days until it planned to kick the plan off on June 17, its options appear somewhat limited.
ebay's scheme, first announced back in April, has always been dependent on ACCC approval, although that wasn't always apparent in its aggressive marketing of the plan. And it is that aggression which is likely to be remembered by its most loyal sellers long after the current brouhaha over its now-failed attempt dies down.
When I attended the first public meeting to promote the scheme in Melbourne last month, the thing that astonished me wasn't
ebay's ridiculous description of people who rejected compulsory PayPal as akin to drug dealers. Nor was it the company's inability to acknowledge the truck-sized holes in its own security efforts. It was the fact that
ebay was so willing to ignore input from loyal sellers who had invested years of effort into selling on the platform, and who knew from direct customer feedback that many people simply weren't interested in registering for PayPal, no matter how much noise was made on the topic.
ebay simply repeated its mantra that its own figures showed that PayPal was safer, no matter what individual sellers may have experienced. It's worth noting that this argument appears to have singularly failed to impress the ACCC, suggesting that the pages of data which
ebay had excluded from public display in its submissions were far from convincing. Secrecy notwithstanding, its arrogance ticked people off royally, and I'm not surprised. If I was a regular
ebay seller, I'd have wanted to hit somebody, fairly hard.
Almost as disturbing was
ebay's unwillingness to acknowledge that if the plan went ahead, it stood to make far more money from individual transactions than is currently the case. The way
ebay officials told it, this shift was a public service and money had nothing to do with it. It seems no-one believed the spin, including the ACCC.
That's good news for the many small sellers who didn't want to force their customers to use a single payment method. But it's bad news for
ebay shareholders, and not just because they've lost out on a potential effort-free revenue stream from forcing people to use an eBay-owned payment method.
It's bad news because it provides a permanent and irrevocable confirmation that
ebay really doesn't give a darn about any of its sellers. Long-term
ebay users have long suspected this to be the case, but the PayPal push provided an absolute bucketload of evidence to demonstrate that in the word of
ebay, the company comes first, second, and third. Buyers rate a passing mention, and sellers are just a conduit for cash.
That doesn't mean that sellers are going to race off to use alternatives such as the Trading Post, if only because
ebay still has the bulk of the eyeballs in this market. But it has delivered a solid kick in the goolies to the concept that
ebay sellers will remain loyal to the platform. Given
ebay's behaviour, why on earth would they bother?
http://apcmag.com/how_ebay_trashed_..._profits.htm
Posted 05/14/2008 01:39 am
