From The Register:

eBay Australia has given up on its attempt to force virtually all payments through its subsidiary PayPal.

The move proved hugely unpopular with users and had to be put on hold while it was investigated by the Australian Competition and Consumer Commission. eBay notified the ACCC of its decision to move to PayPal-only payments - this prevents the company being sued for that conduct while it is being checked by regulators.

eBay's Australian boss Simon Smith said: "While we disagree with the ACCC's draft notice, we have decided to withdraw the notification to stop any further confusion and disruption among the eBay community."

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