Is eBay a Monopoly?


The company is such a large presence in online retail that some might assume the “e” in e-commerce stands for eBay rather than for “electronic.” But does eBay actually have a monopoly over Internet auctions?

In 2007, three sellers filed a lawsuit against eBay and argued that it was in fact a monopoly. At issue in the suit was eBay’s purchase of PayPal , a popular service that allows buyers and sellers to transfer money. Essentially, it’s like running the most popular store in the world and also owning one of the major credit card companies. According to BusinessWeek, the sellers argued eBay “restrained trade” and forced them to use this service and pay “artificially inflated and supracompetitive fees” when selling their goods.

However, the U.S. District Judge in charge of the case recently threw out the complaint, essentially arguing there was not enough evidence to support this claim. The sticking point in the case seems to be that even though eBay encourages buyers and sellers to conduct their sales through PayPal, it does not actually require it.

Yet, if eBay is not a monopoly, it certainly still qualifies as shameless. In 2008, eBay actually did try to ban all other pay services besides PayPal in Australia, but backed down amid controversy over the move. And in one notorious exchange at the time, a vice president at eBay compared people who don’t want to use PayPal to heroin users.

—For a comprehensive credit report, visit the Credit Center.

Show Comments

Back to Top