Antitrust Action Alleges a PayPal Monopoly
Sunday, April 29, 2007
eBay says profitable payment service faces California suit
Has eBay improperly monopolized payment services to the unfair advantage of its PayPal unit? That is a question the company addressed last week when it announced that it is facing a purported antitrust suit over the matter. According to MarketWatch, the plaintiff filed the suit this month and seeks treble damages and an injunction. Citing a filing with the Securities & Exchange Commision, the story reports that the auctioneer believes it has "meritorious defenses" and intends to defend itself "vigorously.
The company has come under criticism for PayPal. Last September, PayPal signed an agreement with 28 state attorneys general involving accusations of misleading business practices. It also reached a preliminary settlement agreement with a proposed class of PayPal customers. MarketWatch notes that PayPal has faced competition recently from Google, which rolled out a rival online payment service in June. eBay said at the time that it wouldn't allow its customers to use Google's Checkout on the eBay site.
Earlier this month, eBay announced impressive first-quarter earning gains, including in merchant services - the PayPal unit that supplies online payment services to Web sites beyond eBay's own properties. The unit saw payment volumes grow 51% to $4.38 billion.
Has eBay improperly monopolized payment services to the unfair advantage of its PayPal unit? That is a question the company addressed last week when it announced that it is facing a purported antitrust suit over the matter. According to MarketWatch, the plaintiff filed the suit this month and seeks treble damages and an injunction. Citing a filing with the Securities & Exchange Commision, the story reports that the auctioneer believes it has "meritorious defenses" and intends to defend itself "vigorously.
The company has come under criticism for PayPal. Last September, PayPal signed an agreement with 28 state attorneys general involving accusations of misleading business practices. It also reached a preliminary settlement agreement with a proposed class of PayPal customers. MarketWatch notes that PayPal has faced competition recently from Google, which rolled out a rival online payment service in June. eBay said at the time that it wouldn't allow its customers to use Google's Checkout on the eBay site.
Earlier this month, eBay announced impressive first-quarter earning gains, including in merchant services - the PayPal unit that supplies online payment services to Web sites beyond eBay's own properties. The unit saw payment volumes grow 51% to $4.38 billion.
posted by Chris and Frank at 1:21 PM
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