Yahoo-Kimo did not violate fair trade laws: FTC

The Fair Trade Commission (FTC) said yesterday that Yahoo-Kimo Inc (雅虎奇摩), the nation's largest online auctioneer, did not violate any laws by charging sellers a handling fee for each transaction.

Yahoo-Kimo was accused by Internet users of abusing its dominance in the market after it began charging its sellers a transaction handling fee -- 3 percent of the closing price -- on top of a listing fee of NT$3 per item, beginning Sept. 1.

"We found Yahoo-Kimo auction is not a monopoly, and it did not engage in unfair competition by using its advantage," commission spokeswoman Chou Ya-shu (周雅淑) said in a statement yesterday.

DAILY LISTINGS

The commission found that on average there were 3.91 million daily postings on Yahoo-Kimo between May 2 and July. 24.

But the postings dropped 12.3 percent to 3.43 million items between Sept. 1 and Oct. 16.

The number of postings on a smaller online auction site run by a local portal PC Home Online (網路家庭) was 50,000 per day, and surged 18-fold to 910,000 on PChome eBay Co (露天市集), a joint-venture formed by PC Home Online and eBay Inc that launched a new auction site on Sept. 25.

NOT A MONOPOLY

While monopoly means a non-competition market, the existence of PChome eBay Co and two other auction sites shows that Yahoo-Kimo was not capable of eliminating other players, Chou said.

Taiwan's online auction market was worth NT$31.7 billion (US$959.3 million) last year, and Yahoo-Kimo took NT$22 billion, or 69.4 percent of the market, according to the commission.

Collecting transaction handling fees is one business model adopted in the world, and companies applying charges need to evaluate the business risk, Chou said.

Yahoo also charges its users in Japan a handling fee, that is 5 percent of the final sale price, Chou said.

Auction giant eBay collects a final value fee, 5.25 percent of closing price in the US, and 10 percent in South Korea, Chou said.

Yahoo-Kimo said yesterday that it was happy with the results of the commission's investigation and it would continue to enhance its service to sustain its business.

RESULTS

As for the declining postings, Yahoo-Kimo said the drop was within its expectations.

PChome eBay Co, however, said that its listings have increased more than expected.

It celebrated surpassing the 1 million mark last month, and thinks it will hit 2 million by next month, company chief executive Simon Yeh (葉奇鑫) said last month.