First mover eBay is impregnable, ACCC concludes

The key to the ACCC's preliminary decision is how much market power eBay and PayPal have.

eBay is clearly a dominant player in online retail and has pioneered the peer to peer and online auction markets.

The ACCC noted that the first mover advantage has helped TradeMe (now owned by Fairfax Media) hold off eBay in New Zealand, and keeps eBay dominant in Australia, the ACCC wrote in its draft ruling.

The ACCC notes that in 2006 ebay.com.au had 72 per cent of all Australian retail website hits. eBay.com was second with 18 per cent, with ebay.co.uk third and ebaymotors.com.au fifth.

Of non-eBay sites, only Grays Online scored more than one per cent of visits by online customers.

OZtion.com.au is now eBay's closest competitor in Australia

Since The Project (as eBay often calls its mandating PayPal plan) was announced in April, OZtion has had growth in member numbers of 22 per cent to more than 275,000 members, compared to eBay's five million members.

The ACCC said total listings on OZtion are now also about 22 per cent of eBay Australia's total listings.

Those numbers underpinned the sale of Oztion to Jumbuck entertainment for $2 million last week. They also provided support for The Project, according to eBay's response to the submissions made to the ACCC.

"A number of sellers will choose alternative platforms in response to the implementation of the Project, providing a strong incentive for eBay to maintain a competitive offering."

The ACCC disagreed with that view.

"OZtion is currently not a significant competitive constraint on eBay … The ACCC also considers that the threat of effective new entry into the supply of online marketplaces in Australia is low."