User reactions, congressional inquiries and its cratering stock price prompted PayPal last month to reverse an announced $2,500 “misinformation” penalty.
The online payment processing company revoked the policy change to its “terms of use” agreement but may still charge objectionable accounts. PayPal now relies on an existing clause, in the fine print of the user agreement that hardly anyone reads, to confiscate $2,500 from accounts.
The Daily Wire further reported:
PayPal, which has deplatformed multiple organizations and commentators for their political views, had released an upcoming change to its acceptable use policy that would have banned the promotion of “misinformation,” as well as “hate, violence, racial or other forms of intolerance that is discriminatory.” Within one day of The Daily Wire reporting on the policy change, PayPal claimed that the guidelines were published “in error.”
Citing a provision in the PayPal user agreement, multiple reports claimed that the policy has been quietly reinstated. However, neither the user agreement nor the acceptable use policy has been amended to include the nixed provisions, according to a review of internet archives conducted by The Daily Wire, which also confirmed the findings with a PayPal spokesperson.
The present user agreement had already enumerated that $2,500 sanctions can be applied to accounts found in violation of the acceptable use policy. The company says that the amount is a “reasonable minimum estimate” for actual damages induced by internal administrative costs to monitor violations, damage to brand reputation, and penalties from business partners.
The acceptable use policy currently bans users from using PayPal for activities which involve various legal infractions, such as infringement of trademarks, sale of narcotics or stolen goods, and certain types of weapons. However, PayPal also retains the “sole discretion” to take action against “items that are considered obscene,” certain “firearm parts or accessories,” or “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory.”
Meanwhile, the user agreement lists the spreading of “false, inaccurate or misleading information” as a restricted activity and has done so for at least eight years. Those who conduct their business in a manner that results in or could result in “complaints” may also incur the $2,500 penalty.
Beyond denying that the misinformation penalty was ever meant to be enforced, PayPal justified the move by noting that the company has long withdrawn $2,500 from users’ accounts after each violation of the acceptable use policy. After seven members of the Senate noted in a recent letter to PayPal CEO Dan Schulman that the current list of prohibited activities largely entails breaches of law, they added that “a vague prohibition on spreading ‘misinformation’ not only would have concerningly expanded the scope of punishable actions, but also would have decreased clarity and increased subjectivity” within the prohibited activities list.
PayPal trended on social media after the new acceptable use policy gained nationwide attention earlier this month, leading thousands of customers to express their disdain for the move and cancel their accounts. The company’s stock price fell precipitously in trading as the unease among consumers appeared to startle investors.
