A lot of people on here are missing the whole argument. First of all, while I wouldn't use the phrase "Paypal is holding us at ransom", although the message is straigtforward and correct. The first thing that needs to be pointed out, is that yes, in many cases we have no other option but Paypal. When completing a transaction on Namepros, we do have other options. NP$, escrow.com, Google checkout. These options are all available and fine. Paypal does not make the lion's share of its profits from domains, however. It does make them from regular transactions of items on ebay. If you want to sell something online, and want to sell it now at auction, rather than having to set a fixed priced at a store like Amazon and waiting, then you have only one option. That option is ebay. Ebay has a monopoly on online auctions. You can define their monopoly by their market share, but it is fairly obvious that they have a monopoly without any official metrics. Overstock.com auctions, while a good idea, do not compete, especially if you are selling anything higher than a certain price. Now, importantly, it is not illegal for ebay to have a monopoly that they built up through solid competition. What is illegal is if they have a monopoly and use it to get a monopoly in another market or use it to control another different market and stifle competition. That is exactly what ebay is doing with Paypal. When ebay was not quite the monopoly it is today, they accepted almost any type of payment there was, bidpay, moneybookers, Western Union. After ebay built up an insurmountable lead, they bought Paypal, and then began slowly getting rid of all accepted payments except Paypal. This in turn drove some of the payment processors out of business. This is similar to when Microsoft built up a perfectly legal monopoly, legal that is, until they started using the monopoly to control other markets, such as bundling a free browser, which drove the browser companies out of business. The one big difference I see, is that Microsoft got in trouble for trying to innovate and give us things for free that we would otherwise have to pay for, which isn't so bad. Ebay and Paypal are breaking the monopoly laws and are not benefiting any customers by doing it, but in fact are hurting customer by limiting choices, raising prices, and bullying customers.
On the price increase front. I am the first to say that business should be able to raise prices over time. I am a huge supporter of the capitalist system and have been since I was 11 years old. The price increases that ebay and Paypal implement are ridiculous. I have never seen a year that both ebay and Paypal did not raise at least some fees. Sometimes the increase is outrageous (500% increase in the listing price for store listings one year). When a company increases prices so much in a year, they should not be able to again next year, and the year after that. The only way ebay and Paypal can get away with it is because of their monopolies.
Now, if anyone wants to argue that we have payment options on ebay other than Paypal, checks and money orders, I am interested. Here is what I can tell you from my experiences on ebay. If you choose to not accept Paypal, your items will sell for probably anywhere from 20%-50% less than it would if you accept it. Also, you will see probably a 200%-400% increase in people who end up not paying and it takes longer to find out that they are not paying. It is true you can continue to use ebay without Paypal and accept those statistics above, but for me personally, I worked my issues out with Paypal, even though I hate them, because I see myself as having zero other options.
So, if I want to sell something via auction online, I really only have one choice, ebay. If I want to accept payments on it, I have only one choice, paypal. That means that they have a monoploy in auctions and that using that they have built up a monopoly in online transactions for auctions (maybe soon, but hopefully not, a monopoly in online payment), and have driven competitors out of business along the way. This is the texbook defintion of a monopoly that needs to be split up a la Standard Oil and AT&T.
P.S. I used to sound like other Paypal supporters on this thread. I said that if they were that bad then people would choose something else. But then I realized upon trying that route that it is an impossible option. No one has a problem with ebay or paypal, until they actually do, and no one thinks that they will have a problem with them before that. The more you use ebay and paypal, the more unaviodable issues will become. Saying that if paypal raises prices so much or messes with customers so much that they will lose their dominant position is not really realisitic. That argument would be similar to saying that if we abolished the minimum wage, that wages would remain where they are, because if McDonalds lowered hourly wages to $1, then Burger King would pay out $2, and Wendy's would go up to $3, and Mcdonald's back up to $4, just because worker competition would cause wages to increase and not accept a $1 an hour job, so wages would not necessarily decrease. While this argument makes technical sense, obviously there are external circumstances, and we are talking about some of the few issues where I think it is acceptable for gov't to step in and regulate big businesses.
Also, companies do get dominant market share for many reasons other than that they are better, i.e. first mover advantage, unfair competition, etc.
