Authoritarian PayPal? Outrage on Twitter As PayPal Tells Users it Can Take $2500 Per Violation of Acceptable Use Policy

PayPal’s (NASDAQ:PYPL) forthcoming Acceptable Use Policy is garnering outrage on Twitter as users must agree to monetary penalties for crossing the PayPal moral guidance line.

A new Acceptable Use Policy, to take effect on November 3, 2022, states:

“You are independently responsible for complying with all applicable laws in all of your actions related to your use of PayPal’s services, regardless of the purpose of the use. In addition, you must adhere to the terms of this Acceptable Use Policy. Violation of this Acceptable Use Policy constitutes a violation of the PayPal User Agreement and may subject you to damages, including liquidated damages of $2,500.00 U.S. dollars per violation, which may be debited directly from your PayPal account(s) as outlined in the User Agreement (see “Restricted Activities and Holds” section of the PayPal User Agreement).”

Some commentators were calling for people to immediately remove their money from PayPal and stop using the payment Fintech.

David Sacks, a well-known VC and politically vocal on social media, was one of the individuals telling people to flee PayPal or else.

Sacks was responding to a comment from David Marcus, recently from Meta (Facebook) where he ran the firm’s digital currency initiative, which eventually collapsed. Marcus used to work at PayPal.

Sacks and Marcus were not alone.

While it appears that the Acceptable Use Policy has now been disappeared from the PayPal website, it remains available on the internet.

While the list of prohibited activities is rather long, and many items make a lot of sense, it effectively comes down to if you say or state something PayPal dislikes, they can punish you by making you pay.

To quote the document:

“You may not use the PayPal service for activities that: involve the sending, posting, or publication of any messages, content, or materials that, in PayPal’s sole discretion, (a) are harmful, obscene, harassing, or objectionable…”

PayPal has long been politically active – not deciding to operate in an apolitical manner. In fact, PayPal links to its political action committee activity on its website.

It has been reported that PayPal is now claiming that the language in the Acceptible Use Policy was a mistake – even though it has been available for several days.

A good question to ask is, where is the Board of Directors in all of this? Offending its users may not be the best approach to building a business.

 

 

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