What is PayPal new Policy? PayPal has backtracked on a published policy that would have fined users $2,500 for spreading “misinformation,” claiming the update had gone out “in error.”
“An AUP notice recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused,” a spokesperson told National Review in a written statement.
The course reversal comes after the policy changes had started to attract media scrutiny as well as criticism on Twitter. Former PayPal president David Marcus even blasted the company over the implication that it could seize customers’ money for finding their views objectionable.
What is PayPal new Policy?
Next time you’re clicking through one of those impossibly long and impenetrable legal disclaimers to a company’s terms of service, it may be time to have a closer look.
A new policy in PayPal’s fine print triggered a storm of outrage over apparent plans to impose, starting on Nov. 3, a hefty fine of $2,500 any time one of its 429 million consumers and merchants expressed what the corporate brass deems to be misinformation.
PayPal quickly apologized over the weekend for what it called “confusion,” claiming it was all just an error, but not before a a deluge of criticism from a number of high-profile individuals—including its own former president, David Marcus.
Marcus took to Twitter to say the new Acceptable Use Policy (AUP) was an “insanity” that forced him to come forward and criticize his previous employer, where he worked for three years from 2011 after former PayPal owner eBay acquired a company he founded and joined it with the payments service.
“PayPal’s new AUP goes against everything I believe in,” he posted on Saturday. “A private company now gets to decide to take your money if you say something they disagree with.”
PayPal’s “Misinformation” Fine Sparks Backlash
A platform’s user agreement is rarely an attention-drawing document. However, early this October, PayPal ignited online discussion with its newest policy. What attracted criticism was an unusual provision stating that the company would fine its customers an astounding $2,500 in damages for spreading “misinformation.”
The provision prohibits customers from using PayPal’s services for activities identified by it as “sending, posting, or publication of any messages, content, or materials” promoting misinformation. The policy does not define what “misinformation” means other than noting that the violation will be decided “in PayPal’s sole discretion.” Under the new policy, a penalty of $2,500 could be imposed for each violation.
The new policy caused an immediate backlash. Social media users were saying they would delete their PayPal accounts to show how much they detested this outrageous policy. The company’s share value dropped as much as 5.3% after the update. The company promptly issued an update saying that the policy was, in fact, “in error.”
Justin Higgs, a spokesperson for the company, explained: “PayPal is not fining people for misinformation, and this language [in the policy] was never intended to be inserted in our policy. We’re sorry for the confusion this has caused.”
Higgs added that the company is in the process of updating its policy changes. Additionally, Higgs also pushed back on the notion that PayPal’s fines are new, saying that its user agreement “has long-stated that PayPal can take funds of up to $2,500 or local equivalent from an account for each violation of the Acceptable Use Policy.” This clarification did little to stop social media users from continuing to share the policy.
Several heavy-weight figures in the industry, including PayPal’s former president David Marcus and Tesla’s CEO Elon Musk (who co-founded PayPal), openly fulminated against the new policy. David Marcus tweeted that the new policy “goes against everything I believe in.” Marcus went on to identify the specific consequences of the policy, noting that “a private company now gets to decide to take your money if you say something they disagree with.”
Marcus rounded up his view on the policy with the word “insanity.” Musk tweeted, “Agreed,” replying to Marcus’s tweet. Some brought their criticisms a step further: Benny Johnson, an American political columnist currently serving as chief creative officer at conservative organization Turning Point USA, tweeted that “social credit is coming to America.”
Johnson called for account holders to “bankrupt PayPal NOW.” Tim Scott, a Republican senator from South Carolina, said before PayPal’s clarification that his office would look into the validity of the policy and take any necessary action to stop such “corporate activism.” Scott has recently co-sponsored GOP-led legislation targeting Google over allegations of bias in its email filtering practices.
After PayPal Revokes Controversial Misinformation Policy, Major Concerns Remain Over $2,500 Fine
After facing backlash earlier this month, PayPalPYPL -2.6% rescinded a line in its policy stating that spreading misinformation on the platform would be subject to a $2,500 fine. Today, the remaining language leaves users and elected officials demanding more clarity over how the platform defines fine-worthy speech.
A part of PayPal’s user agreement that says any customer in violation of the platform’s “acceptable use” policy is subject to a $2,500 fine has been in place since at least 2013, according to the website’s archive. The fine had largely gone unnoticed until earlier this month when PayPal updated its acceptable use policy to state that messages which are “fraudulent, promote misinformation or are unlawful” are in violation of the policy and, by extension, subject to the fine. The “acceptable use” policy stated that determinations of which messages violated the policy would be made at “PayPal’s sole discretion.”
After drawing intense backlash from commentators stating that the policy could infringe upon free speech, the company rescinded the line in the policy citing misinformation and issued a statement saying it was posted in error on Monday, October 10. “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy,” a spokesperson for the company said. PayPal’s former president David Marcus was among dissenters, posting a tweet objecting to the policy update, which was amplified further when Elon Musk responded “Agreed.”
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