Ebay/Paypal Lawsuit Can Continue, Judge Rules

[Frank Provasek]

This is of particular interest to eBay sellers of coins, particularly bullion issues, where eBay's banning sellers from accepting checks, money orders, and wire transfers means that sellers must pay transaction fees exceeding the normal profit spread on those items,

 

 

 

SAN FRANCISCO (CourtNews, 1-6-12) - A federal judge refused to dismiss most of a class action that claims eBay monopolized the market for payment systems used in online auctions.

The auction site allegedly raised fees and shut out payment-system competitors after acquiring PayPal in 2002.

The class claimed eBay has made PayPal the only viable option for sellers, and therefore sellers have to pay fees to eBay both for listing and selling their products and for using PayPal.

EBay's accepted payment policy prohibits sellers from asking buyers to contact them for additional payment methods or from asking buyers to use a method a seller did not include in their listing, according to the class. If it believes a seller violates the policy, eBay removes seller's listings.

EBay claimed that the statute of limitations barred accusations by lead plaintiff Charlotte Smith and a class of others who sell products on eBay.

If the court found that the clock began when eBay acquired PayPal in 2002, it would have expired in 2006 under the four-year statute of limitations for private antitrust claims.

U.S. District Judge James White disagreed in an unpublished decision Thursday that the class tied its claims of attempted and actual monopolization to eBay's acquisition of PayPal.

The class instead tied the claims to the continued modification of eBay's accepted payment policy. This included prohibiting payments through Google Checkout in 2006; doubling PayPal Buyer Protection in 2007, which allegedly eliminated buyer protection for non-PayPal transactions; requiring sellers to accept electronic payments in 2008.

Since the changes allegedly "inflicted new and accumulating harm" on the class, eBay enforced an alleged tying agreement within the limitations periods.

The sellers also argued that there is little motivation for other online-payment systems to enter the market since sellers can accept payment only via PayPal, and those that do are foreclosed from offering their services directly to the class at a lower, market-driven cost.

White said, however, that these "conclusory allegations are not supported by facts alleged elsewhere" in the first amended complaint

He nevertheless gave the class leave to amend allegations that the alleged tying between eBay and PayPal caused harm to competitors.

The class alleges that the relevant market is online auctions and that the tied product is online payment services. White said the relevant market might be sustainable, rejecting eBay's claim that the market is "impermissibly narrow."

Noting that the class identified specific fees at issue, White also rejected eBay's motion to toss antitrust injury claims, opining that the arguments are better addressed by summary-judgment motions.

The class also has leave to amend claims that eBay improperly collects a shipping fee when buyers and sellers actually handle shipping and related fees. White dismissed the claims Thursday, saying the class did not show lack of consent to pay eBay a "final value fee," of which the shipping charges are a part.

[James_OldeTowne]

PayPal is what I despise MOST, BY FAR about eBay, and is why I did a 180 and now despise the company. I hope the lawsuit is successful to the Nth degree. It is a monopolization of payment methods, and it is despicable practice.

[Observer44]

AMEN !!!!!!!!!!!

[Mokiechan]

Hate Paypal, wish I could just disconnect but then I'd lose potential bidders/buyhers. Godspeed Class Action, Godspeed!!!

 

Later,

Malcolm

 

 

[Kamillion]

if there wasnt paypal, i would bet 50% or more of all online transactions (on everything) would not occur.

 

fwiw.

[johnny9434]

if there wasnt paypal, i would bet 50% or more of all online transactions (on everything) would not occur.

 

fwiw.

maybe thats just what ebay needs is a wake up call jmo

[Kamillion]

if there wasnt paypal, i would bet 50% or more of all online transactions (on everything) would not occur.

 

fwiw.

maybe thats just what ebay needs is a wake up call jmo

 

not just ebay, but since ebay owns paypal yes they would be affected more.

[coinman_23885]

I'm not surprised that eBay is being sued, and quite frankly, I'm only surprised that the lawsuit wasn't filed sooner.

[James_OldeTowne]

if there wasnt paypal, i would bet 50% or more of all online transactions (on everything) would not occur.

If there wasn't PayPal, their competitors would simply fill the void. The problem is that eBay allows essentially ONLY PayPal. That is what I despise. They can't make "enough" simply facilitating online auctions, and just have to get their greedy fingers wrapped around the payment process, too.

 

Incidentally, I clearly remember the huge banner adds that eBay used to have that said basically "PayPal - free now, free forever". Boy, "forever" didn't last very long, did it?

[jom]

if there wasnt paypal, i would bet 50% or more of all online transactions (on everything) would not occur.

If there wasn't PayPal, their competitors would simply fill the void. The problem is that eBay allows essentially ONLY PayPal. That is what I despise. They can't make "enough" simply facilitating online auctions, and just have to get their greedy fingers wrapped around the payment process, too.

 

Incidentally, I clearly remember the huge banner adds that eBay used to have that said basically "PayPal - free now, free forever". Boy, "forever" didn't last very long, did it?

 

Agree 100%...it is the ONE main reason I don't do eBay sales anymore. If they'd allow me to just take a check I'd probably use eBay more.

 

jom

[messydesk]

Good to hear. Of course, if eBay ends up losing the class action suit, I imagine they'll just restructure their fees to cover their losses. It's not like there's a viable alternative at the moment.

[Sanity Lost]

Break up ebay and paypal into several companies?

[Kamillion]

its better for all businesses, when trying to sell quantity, to allow buyers to make purchases with credit (cards or paypal).

[Houston Investor]

Ebay / Paypal costs plus shipping cost equal about 15% of sales as a rule of thumb. And this is just variable selling expense. It takes a markup of about 40% over cost to make a 15% ROI on Ebay considering fixed costs for things like books, supplies, subscriptions, etc.

 

The only dealers I know who make money buying and selling bullion do it in large quantity primarily at shows. They certainly don't depend on Ebay. This money can be invested back at the shop to buy numismatic material that walks into the shop "right" or walkup sellers at the show.

[Conder101]

Incidentally, I clearly remember the huge banner adds that eBay used to have that said basically "PayPal - free now, free forever". Boy, "forever" didn't last very long, did it?

That was before eBay bought Paypal. Paypal was the one claiming free now and forever but they started charging fees even before eBay bought them.