eBay: “there will be only one winner in online payments;” FCC’s Open Internet regs are catnip for netopolies

November 3, 2009

eBay is licking their chops at the prospect of the FCC’s open Internet regulations locking in their dominance of:

Like Google, eBay knows that “openness” is industrial-policy-speak for:

  • Rewarding favored “national champions” and
  • Locking in first-mover and netopoly scale-and-scope-advantages.

The netopolists must be giddy at how they now have the full power of the FCC focused on permanently locking in their market dominance going forward.

  • (Remember eBay recently decided to not compete against Amazon’s Internet retailing dominance — see WSJ articleeBay Retreats from Web Retailing.” Remember also that Google has retreated from competing with eBay’s PayPal. Apparently there’s plenty of the open Internet for the netopolists to dominate without resorting to competing amongst themselves.)

This gets us to what eBay is saying today about the lack of competition eBay expects there will be in an Open Internet — see today’s WSJ article: “PayPal Woos Developers in Bid to Protect its Turf.”

  • “We’re taking all of our product capabilities and making them open and that much easier for you to use,” said Scott Thompson, PayPal’s president.”…
  • “PayPal executives say they believe there will be only one winner in online payments. “Consumers don’t need more single purpose accounts,” said Mr. Thompson.”[Bold added.]

In closing, it is supremely ironic that the FCC, in its proposed Open Internet regulations, effectively will reverse it’s 18-year practice of promoting competition from new entrants to entrenched incumbents, to now protecting entrenched incumbents (Google, eBay, and Amazon) from new entrant broadband competition in cloud computing, applications or content.

  • If it is not the FCC’s intent — to exempt dominant companies from the FCC’s proposed open Internet regulations or to protect Google, eBay or Amazon from new entrant competition — the FCC could easily close “The Google Loophole” (para 104) and apply net neutrality to all Internet players as the FCC’s principles currently do now.



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