PayPal Maintains Policies Penalizing Users for “Intolerance” After Free Speech Backlash

PayPal maintains policies that penalize users for “intolerance,” even after being forced to abandon similar rules policing misinformation, creating unease among free speech advocates.

PayPal attracted ire last weekend when it published an update to its Acceptable Use Policy, including updates that labeled ” misinformation ” a category of content that could lead to financial penalties of $2,500.

PayPal responded to the backlash by withdrawing the update and labeling it an “error.” However, the company continues to rely on guidelines that provide for penalizing users for speech deemed intolerant or discriminatory.

PayPal’s policies include a clause barring the “promotion of hate, violence, racial or other forms of intolerance.” PayPal has not provided details about what the terms entail and declined to provide a comment to the Washington Examiner.

The clause “suffers from the same defect as a lot of the other proposed prohibitions on speech, in that it’s vague,” Aaron Terr, senior program officer at the Foundation for Individual Rights and Expression, told the Washington Examiner. “And it’s left open to interpretation by PayPal employees, and because of its vagueness, that gives them a lot of discretion to essentially just enforce that provision against disfavored speakers, and to do so in a viewpoint-discriminatory manner.”

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The breadth of the PayPal policy led some to speculate about what sorts of speech could be affected. “Might you, for instance, be sharply criticizing a religion?” UCLA law professor and First Amendment expert Eugene Volokh wrote . “Or saying things that sharply condemn, say, government officials (police, FBI, etc.) in ways that some might say involve ‘promotion of hate’? Or praising people who have acted violently (e.g., in what you think is justifiable self-defense, defense of others, or even war or revolution)? If PayPal thinks it’s bad, it’ll just take your money.”

Others noted the $2,500 damages that PayPal says can be taken directly out of accounts isn’t evident to most users. “The fact that the $2,500 damages clause is still in the PayPal policy today still seems like a pretty big deal,” wrote Techdirt editor Mike Masnick. “Hiding the fact that a company might take $2,500 from you by burying it in an acceptable use policy no one is going to read seems like not a great thing, whether or not the policy includes ‘misinformation’ as a triggering event.”

The revoked policy update relating to “misinformation” was criticized by the company’s founders after it was released. The update to the AUP “goes against everything I believe in,” former PayPal President David Marcus said in a Saturday tweet. Elon Musk, who was a co-founder of the company, likewise said the update “goes against everything I believe in.” Musk and fellow co-founder Peter Thiel have been vocal advocates for free speech.

The controversy has had adverse effects on the company’s finances. PayPal stock saw a stark drop on Monday. Searches for “delete PayPal” also saw a