Recently a 38 page “anonymous” submission was made to the ACCC protesting eBay’s move to a PayPal only payment option. This submission has been by far the most detailed one yet and was obviously compiled by a company with enough resources to pay the lawyers to draft it. If you want to read the whole submission I suggest you grab yourself a cuppa first and be prepared for the legal jargon. ACCC “name withheld” submission

The submission argues quite well for the case of rejecting eBay’s bid to force a PayPal only payment option. But what I found most interesting was data used to support the argument of eBay’s already major market dominance. I think that this evidence must be weighed up when making a decision whether to keep selling on eBay or in protest move to another auction site.

I have taken the liberty of quoting verbatim large tracts of the submission and have included all footnotes:

4.7 The following statistics suggest a very high proportion of online buyers in Australia visit,
become members and buy on the Australian eBay Site:
(a) 5.94 million Australians buy online and 84% of those online buyers choose to visit
the eBay Site7;
(b) eBay has in excess of 5 million members in Australia 8;
(c) one in 3 adult Australians is an eBay member, making the eBay Site the most
popular shopping destination in Australia9;
(d) in March 2006, eBay was ranked the 5th most frequently visited website in
Australia10;
(e) during March 2006, the eBay Site had a unique audience of 4,439,000 in
Australia11;
(f) in an online survey of users in Australia of ‘online auction’ sites conducted by the
Communications Law Centre Ltd, users were asked to select from a number of
‘online auction’ sites that they had used to make a bid or list an item for sale. The
results are set out below12:

ONLINE AUCTION SERVICES USED TO MAKE A BID OR LIST AN ITEM FOR SALE
NUMBER TIMES SELECTED, % OF TOTAL USERS WHO RESPONDED (462)
eBay (ebav.com.au - Aus) 450 97.4%
OZtion (oztion.com.au - Aus) 60 13.0%
GraysOnline (graysonline.com.au - Aus) 29 6.3%
Amazon Auctions (auctions.amazon.com - USA) 20 4.3%

(g) from the survey responses above it was also determined that:
(i) 72% of users who responded had only used the eBay Site in Australia;
(ii) 25% had used the eBay Site and other ‘online auction’ sites in Australia;
and
(iii) only 3% had used other sites and had not used the eBay Site in Australia 13;

(i) on an average day on the eBay Site in Australia:
(i) a car is sold every 12 minutes and 27 seconds;
(ii) a laptop is sold every 8 mins and 46 seconds;
(iii) an antique is sold every 3 minutes and 7 seconds;
(iv) a baby item is sold every 46 seconds;
(v) a DVD is sold every 23 seconds; and
(vi) a piece of women’s clothing is sold every 13 seconds15;

4.11 OZtion, a provider of online marketplace services to online sellers, is the only close competitor of eBay in Australia. OZtion claims to be the second largest dedicated ‘online auction’ website in Australia. However:
(a) by August 2005, OZtion had attracted only 1,000 ‘regular’ sellers17;
(b) in November 2005, OZtion had only about 100,000 monthly visitors18; and
(c) OZtion currently has only 260,238 members (i.e., only around 5% of eBay’s
members)19.

As you can see from the above statistics eBay is and will continue to be the leading online auction site in Australia. The reason eBay has always been such a good place to buy and sell is because it has been able to attain such a critical mass. It doesn’t do you, as a seller, any favours to dilute the potential market of buyers for your products. So whilst the other auction sites such as Oztion and newcomers Bang4Bucks and Trading Post online are rubbing their hands with glee at the amount of seller dissatisfaction with eBay, it is doubtful, that they will be able to attain the critical mass of market share that eBay enjoys and offer any real alternative.

So whilst I understand the argument that there will be no real alternative unless people choose to move their business to these other sites I think you really need to consider whether it is in your best interests. Sellers who have made the move have reported sales as being “very slow”. Over time perhaps, if eBay continues down the path of making it hard or impossible to do business on their site, and the sellers all leave, then the buyers will have no choice but to look elsewhere as well. The industry may well be in for a shake-up but in my opinion it is still a ways down the track and there is hope that eBay will continue to offer a great platform for buyers and sellers to find each other.

The ACCC has still make a decision on eBay’s application but my guess is that they will deny it. Lets hope we get the decision soon and that eBay sees the error of their ways and tries to repair some of the damage to their reputation that this application has caused.

What’s your opinion on all of this? Does it affect you at all? Have you considered moving? Feel free to leave a comment below.

4 The Allen Consulting Group, I Got it on eBay!: The Economic Impact of eBay in Australia, 5 February 2008, at
page i.
5 eBay, eBay Australia celebrates 5 millionth member (as at 31 January 2007), available at
http://pics.ebaystatic.com/aw/pics/au/pr/5%20Million%20alert%20FINAL.pdf as at 1 May 2008.
6 N Moustakas, Going Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law
Centre 2006 at page 44.
7 According to ACNielsen Australia Consumer Report 2H2006, November 2006: eBay, eBay Australia celebrates 5
millionth member (as at 31 January 2007), available at
http://pics.ebaystatic.com/aw/pics/au/pr/5%20Million%20alert%20FINAL.pdf as at 1 May 2008.
8 eBay, eBay Australia celebrates 5 millionth member (as at 31 January 2007), available at
http://pics.ebaystatic.com/aw/pics/au/pr/5%20Million%20alert%20FINAL.pdf as at 1 May 2008.
9 eBay, eBay Australia celebrates 5 millionth member (as at 31 January 2007), available at
http://pics.ebaystatic.com/aw/pics/au/pr/5%20Million%20alert%20FINAL.pdf as at 1 May 2008.
10 Nielsen//NetRatings NetView (home and work panel measurement, March 2006) (Source: N Moustakas, Going
Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law Centre 2006 at page
43).
11 Nielsen//NetRatings NetView (home and work panel measurement, March 2006) (Source: N Moustakas, Going
Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law Centre 2006 at page
43).
12 N Moustakas, Going Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law
Centre 2006 at page 44.
13 N Moustakas, Going Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law
Centre 2006 at page 44.
14 N Moustakas, Going Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law
Centre 2006 at page 45. Note that some of the sites listed in the table are not ‘online auction’ sites, suggesting
they are not close substitutes for the eBay Site: www.pickles.com.au operates like a traditional ‘live’ auction.
Users can make bids online during live auctions; www.andale.com offers tools for online auctions but does not
conduct online auctions; www.fowles.com.au is an offline auctioneer advertising its service online but it does not
conduct any online auctions; www.toabao.com is China’s leading auction site but it is not available in English. On
the relevant market in issues, eBay’s market share is likely to be in excess of 91.28%
15 eBay, eBay Australia celebrates 5 millionth member (as at 31 January 2007), available at
http://pics.ebaystatic.com/aw/pics/au/pr/5%20Million%20alert%20FINAL.pdf as at 1 May 2008.
16 eBay, eBay Australia celebrates 5 millionth member (as at 31 January 2007), available at
http://pics.ebaystatic.com/aw/pics/au/pr/5%20Million%20alert%20FINAL.pdf as at 1 May 2008.
17 Fleur Doidge, ‘New online auction site aims at resellers’, IT News, 29 August 2005 (Source: N Moustakas, Going
Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law Centre 2006 at page
43).
18 N Moustakas, Going Going Gone: Online Auctions, Consumers & the Law, A Report by the Communications Law
Centre 2006 at page 47.
19 OZtion, “Quick Stats” at http://www.oztion.com.au. See also OZtion Announcement on 14 April 2008 available at
http://www.oztion.com.au/Company/news.aspx as at 1 May 2008.

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