Online payments network PayPal has backed away from a controversial policy that made it possible for users to be fined up to $2,500 for spreading “misinformation”. The payments company claimed that the policy update was posted “by mistake”.
The now-withdrawn misrepresentation clause in PayPal’s Acceptable Use Policy (AUP) will take effect on November 3, expanding the list of prohibited activities to include “the sending, posting, or dissemination of any messages, content, or materials that ‘promote misleading information.'”
But the policy snapshot says otherwise. PayPal caves after a backlash on social media. Read the full story below! https://t.co/5KX1d6O3RP pic.twitter.com/aWEdw86Xvd
– thetechstartups (@thetechstartups) October 9, 2022
But a snapshot of the political terms suggests otherwise. PayPal collapses after a backlash on social media. Read the full story below!
– thetechstartups (@thetechstartups)
PayPal has since stated to various media outlets that the controversial clause was posted in error and contained incorrect information, stating that it will not fine its users for posting misleading information:
PayPal does not fine people for misrepresentation and we never intended to include this evidence in our policy […] Our teams are fixing our policy pages. We regret the confusion this has caused.”
The controversy spread like wildfire on Twitter among the crypto community, but not only — many users of the social network continued to comment on the matter even after the retraction.
Lightspark CEO and Former President of PayPal David Marcus classified as The “crazy” is that “now a private company decides to take your money if you say something they don’t agree with.”
Tesla CEO and former PayPal co-founder Elon Musk responded to Marcus’ tweet by saying, “I agree.”
Sid Powell, co-founder of Maple Finance, said the case in question is a classic example of the importance of maintaining custody of your own money.
PayPal is a good example of why you need to keep your own money. Your money used to be separated from free speech. Now keeping your money is the only way to protect that right for yourself
– Mr. Powell () (syrupsid) October 9, 2022
PayPal is a good example of why you need to keep your own money. Personal finance was separate from freedom of expression. Now, custody of your own money is the only way to protect that right for yourself.
– Mr. Powell () (syrupsid)
Michael Van de Poppe, founder and CEO of Eight, a cryptocurrency education and advisory platform, delivered a short and candid opinion, calling it “the end of PayPal.”
The end of PayPal.
Buys # Bitcoin.
– Michael van de Poppe (CryptoMichNL) October 9, 2022
The end of PayPal.
– Michael van de Poppe (CryptoMichNL)
But not everyone found the item deleted by PayPal dishonorable to its users.
Meltem Demirors, director of strategy at digital asset investment firm CoinShares, said that under any circumstances, companies have the right to choose who can use their services without having to provide further explanations about it:
2/ Whether or not it is expressly stated by their terms of service, all types of companies from @employee I am @employee to (insert service provider here) to engage in censorship and have the right to refuse service and access to anyone they choose, at any time, without explanation
– Meltem Demirors (Melt_Dem) October 9, 2022
2/ Whether or not this is expressly stated by their terms of service, all types of companies from github to PayPal to (insert any other service provider here) engage in acts of censorship and have the right to refuse to provide services and access to anyone they choose, at any time , without explanation
– Meltem Demirors (Melt_Dem)
“If you think cryptocurrencies are immune to this, you are either naive or willfully ignorant,” she said, adding:
“Currently, 31% of post-merger Ethereum blocks are OFAC-compliant, which means they censor transactions associated with specific contracts and addresses on a state-sponsored list.”
“Currently, 31% of post-merger Ethereum blocks are OFAC-compliant, which means they censor transactions linked to contracts and addresses selected from state-mandated lists.”
While implementing fines would be a first for PayPal, the payments giant has a practice of banning users who do not align with them politically, having severed ties with domain registrar Epik in October 2020 after the company provided services to Proud Meninos and other conservative groups.
Like the broader stock market, PayPal is down 64.65% in the past 12 months, according to Yahoo Finance.
The Nasdaq is set to reopen on Sept. 10 at 9:30 AM EST, so it remains to be seen if the clause and its subsequent withdrawal will affect PayPal’s share price.