Earlier this month, PayPal (NASDAQ:PYPL) was slammed for its authoritarian Acceptable Use Policy that was slotted to take effect next month. PayPal decided that it could charge users $2500 – per infraction – if they said or commented on anything PayPal did not concur. PayPal’s blatant abuse of its position as a top payments and transfer Fintech obviously crossed many lines, offending users, with some calling PayPal customers to cancel their accounts immediately. PayPal soon reversed course claiming the updated policy had been a mistake, even though it had been distributing it for days.
Yesterday, House Republicans revealed a letter sent to PayPal CEO Dan Schulman, seeking answers for PayPal’s outrageous move.
House Financial Services Committee Republican Leader Patrick McHenry and House Energy and Commerce Committee Republican Leader Cathy McMorris Rodgers, along with Tom Emmer and Morgan Griffith, the top Republicans on each Committees’ Oversight Subcommittees, criticized PayPal in a letter for its Policy that would stifle free speech.
The letter states:
“As a leading financial technology company, it is concerning that a user agreement that contemplates the restriction of free speech was uploaded and disseminated to PayPal users – even if in error. We understand your company is currently investigating this matter. Upon the conclusion of your investigation, we request that you provide a briefing for the Committees as soon as practicable.”
The House Republicans want to know who approved the Policy change and what the timeline is for an internal investigation that PayPal is said to be pursuing. The letter requests a response from PayPal management, no later than October 27, 2022.
PayPal’s actions have re-invigorated a broader discussion about financial services firms and their ability to discriminate or operate in an intolerant manner when their customers differ from their political leanings. As the Republicans are widely predicated to retake the House leadership, and perhaps the Senate, Fintechs that operate in a discriminatory manner may be in line for targeted legislation.