A change in PayPal’s policies has blown up in its face. PayPal claimed the right to debit accounts $2,500 for “misinformation.” It would be the sole judge of what constitutes misinformation. In the face of widespread user fury, PayPal backed down, claiming “the language was never intended to be inserted into our policy.” Even with the removal of that language, it still has language financially penalizing some forms of expression.
People often disagree on facts. Some people make claims which others say are false. Non-fiction writers are in the business of asserting facts, and sometimes they claim that what’s “common knowledge” is wrong. Many writers get paid through PayPal, and sometimes it’s the only option the customer offers. If PayPal decides your article is wrong, it could take away a large fraction of a month’s income.
The retraction constitutes an admission that PayPal itself issued a serious piece of misinformation. Some people on Twitter have suggested it should give all its customers $2,500 for that. It’s hard to imagine how a false claim of a major change in policy could have gotten onto PayPal’s website, and they haven’t explained. It seems more likely that they thought they could get away with it and then found themselves facing a major customer revolt. The question is only whether they’re inept or dishonest.
Even with the retraction, writers still aren’t safe. You can still be fined, with PayPal as the judge of its own complaint, for activities that relate to “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory.” “Hate” and “intolerance” are vague words that could apply to strongly stated opposition to anyone. Suppose you write an article saying the US should declare war on Russia. (I don’t hold that position; it’s just an example.) That’s definitely promotion of violence; war is a very violent activity. It’s arguably promotion of hatred of Russia.
As Eugene Volokh notes in the article, even purchases could constitute promotion of hate and intolerance. Suppose you research hate groups and subscribe to their publications to keep up on them; could PayPal grab $2,500 from you for that? I’d hate to bet against it.
No bank judges your transactions this way, as long as it doesn’t think you’re breaking any laws. PayPal is off on a power trip, setting itself up as an arbiter of truth. We already know how badly social media do at identifying misinformation and other rule violations; there’s no reason to think that PayPal would do better. It’s bad enough when writers lose a communication channel with their audience, but that’s nothing compared to having their money taken outright. $2,500 is right in the sour spot where it hurts to lose it but it’s not cost-effective to hire a lawyer to recover it.
I’m in the process of removing all activity from PayPal. You should consider doing the same.