eBay Germany faces PayPal probe

By John Oates

Posted in Small Biz, 26th February 2010 15:53 GMT

eBay Germany is being investigated by competition authorities concerned that its tying of PayPal to certain eBay purchases is in breach of consumer law.

eBay.de recently asked sellers with low feedback points to offer PayPal. The company justified the move because it said the number of bad buying experiences is twice as high from sellers with less than 50 feedback points than the average.

The FCO said it had yet to launch a full investigation but was looking into the complaints. The regulator noted that the rule change meant sellers were charged an extra 1.9 per cent on sales made.

eBay said: "We are in contact with the FCO regarding their notification to look into the new level of protection which we are introducing to our marketplace for our buyers. We appreciate the opportunity to get into further dialogue with the FCO around the initiative.

"We are convinced that asking sellers with few feedback points to offer PayPal as one payment option on eBay alongside further payment methods is to the benefit of both our buyers and sellers and legally completely unobjectionable."

eBay has already got into trouble in Australia where it tried to force almost all transactions to go through PayPal. Users were unimpressed, as were Ozzie consumer protection groups, and eBay performed a swift U-turn. Similar moves in the US also went down badly.