eBay announced yesterday that it going to fight the ACCC over its PayPal ruling.

I’m not big on internet auctions. But I use the secondhand book site Abebooks a lot. It is in many ways similar to eBay – rather than selling goods directly to consumers, Abebooks just acts as an intermediary between book buyers and secondhand book sellers. Like eBay, customers can contact sellers directly if they have questions or need to alter shipping details after the initial sale. And also like eBay, a rating system is used to build reputation, although, considering most sellers are established bookstores, the rating system isn’t as crucial to Abebooks as it is for eBay.

But unlike eBay, Abebooks has always had only one payment method. It has never opened its sales system to competing payment devices. It did mandate in 2006 that all credit card transations were to be processed by Abebooks itself, rather than passed onto the bookstores to process, but it has never offered customers the ability to directly transfer money from their bank account, or to send cheques to the seller.

But it is unlikely that the ACCC is going to pursue Abebooks anytime soon, even though the payment options the book seller offers are more limited than those now being implemented by eBay. (eBay will continue to allow cash payments upon pickup, and the PayPal system allows users to do bank transfers, rather than having to go through a credit card as an intermediary.)

eBay’s mistake was to allow third parties access to their sales system in the first place. The ACCC can only claim that it the auction site is in violation of the Trade Practices Act prohibition on exclusive dealing because eBay has already demonstrated that its sales system can technically be open to other payment devices. If eBay had only ever offered an internal payment device – as Abebooks does – then it would be unlikely that it would attract the regulator’s attention. PayPal is owned by eBay – to what extent should they be treated as seperate companies, rather than an entirely merged entity?

What does this matter? The comparison between Abebooks and eBay shows that the prohibition on exclusive dealing depends perhaps more on historical circumstances as it does on theories about economic efficiency. Forcibly opening up the industrial processes of integrated firms to competitors is a bit hard for the competition regulator. Blocking attempts at integration by firms that have in the past allowed a degree of open access is much easier. But surely both have similar merits – if the ACCC claims it knows the most efficient and competitive degree of any given firm’s integration, why wouldn’t it be going hard against Abebooks as well?