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PayPal & decisions on acceptable use

As you may know Open Query uses PayPal for some of its financial transactions. I filed the following question with PayPal support. Note that with this question I regard it as completely immaterial whether one supports of Julien Assange or WikiLeaks actions or not. Naturally companies have the right to choose which clients to serve, but in this case they did cite a specific clause as the reason for cancellation and I don’t see how it applies. Also, PayPal is close to an effective monopoly in its sphere of operation, and that too comes with consequences and responsibilities. Anyway, the letter is below – naturally I’ll also post PayPal’s response.

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As a business client of PayPal, I would like to inquire what PayPal’s decision making process is regarding violation of its “Acceptable Use” Policy.

I refer specifically to the published (https://www.thepaypalblog.com/2010/12/paypal-statement-regarding-wikileaks/) permanent restriction of the WikiLeaks account, quoting “… payment service cannot be used for any activities that encourage, promote, facilitate or instruct others to engage in illegal activity.”

Considering that at this point in time no charges have been laid against WikiLeaks for any of its activities, in any country, and not even a subpoena has seen the light of day, what basis did PayPal use for this decision?
Surely if there is illegal activity, this is typically indicated by a criminal conviction or at least a subpoena related to a prosecution.

I find it extremely worrying, and would appreciate some more clarity as this may our continued use of your service. Naturally companies have the right to choose which clients to serve, but in this case PayPal did cite a specific clause as the reason for cancellation and I don’t see how it applies.

Obviously, we would prefer to not conduct business through an organisation which may at any point cancel our service for essentially arbitrary reasons which may include political disagreement, lobbying by third parties, or other forms of pressure. It would be great to narrow down that list of possibilities, ideally to 0. The law exists for a reason, it protects us all. Companies can’t go about playing judge&jury.

Awaiting your response,
Regards,
Arjen Lentz
Exec.Director, Open Query

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PayPal’s initial response

Thank you for contacting PayPal in regards to our acceptable use policy
and our decision made on the account for WikiLeaks.

For security reasons we cannot discuss any details of a PayPal account
with a third party. The status of a PayPal account can only be discussed
with the account holder to ensure that sensitive account information is
not disclosed. For more information regarding WikiLeaks donations, we
advise you to contact the organization called Wau Holland used to raise
funds for WikiLeaks.

To learn more about the Acceptable Use Policy, please refer to our Help
Centre and the Legal Agreements section on the PayPal website.

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My reply

Thank you for your reply.
The documents you’re referring to explicitly do not answer my question, which is why I asked. I am inquiring about other publically available information, from you, and asking for clarification:

PayPal made a public statement about cancelling Wau Holland’s PayPal service, quoting a specific sentence from the acceptable use policy. It’s at https://www.thepaypalblog.com/2010/12/paypal-statement-regarding-wikileaks/
So, both the fact that an account was cancelled and some aspect of the reasoning was made public by you.

So all I am asking is clarification of your own this public statement, as it affects me as a PayPal client.
The sentence you refer to in the publication is “… payment service cannot be used for any activities that encourage, promote, facilitate or instruct others to engage in illegal activity.” and such matters are, by nature, a matter of public record also. Therefore, it should be no problem at all for you to simply tell me what illegal activity you are referring to.
Did they promote, facilitate or instruct? Which one is it? And which illegal activity?

As you’ll be aware, what is “illegal” is defined by law; if the law has been broken, charges can be filed – then of course there is a presumption of innocence, but if a case is proven and a conviction is made, then naturally action is taken. No charges have been filed against Wau Holland, thus PayPal appears to have no legal basis for its action – it amounts to arbitrary choice and not actually based on the stated Acceptable Use clause.

As I mentioned in my original question, of course a company has the right to choose its customers – that’s why it has terms, conditions, acceptable use policies, etc. It makes it clear to would-be-customers what can be expected.
If you put in a clause “we reserve the right to cancel any client’s service at any point at our discretion” then indeed you can do what you like, and clients know what to expect. It’s clear. However, that’s not what you did.

In this case your actions don’t appear to jive with your own published policies, and your initial response to me does not inspire any more. The issue in a way has nothing to do with WikiLeaks or Wau Holland and whether their actions are likable or not. But what it appears to mean for PayPal clients: if a malicious third party contacts PayPal or PayPal itself “feels like it”, my account may be suspended even if I did not break any stated PayPal policy.

As a person, and entrepreneur, this worries me greatly.
It becomes a matter of PayPal being predictable and trustworthy as a business partner.
I think that is quite worthy of a more constructive and comprehensive response from the side of PayPal.
thanks

Regards,
Arjen.

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Their reply (9 Dec)

Thanks for contacting PayPal. I appreciate the opportunity to assist you with your questions.

(yes that was the entire reply)

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My reply (9 Dec)

yes? I too would appreciate that [assisting me with my questions], but you haven’t so far. The above text was the only bit in your email, not actually addressing my questions. Looking forward to your proper reply.
thanks

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No further correspondence was received. On the same day though, this appeared in the press: Caving to pressure from supporters, PayPal releases WikiLeaks’ funds

Well, that’s something, But doesn’t actually address the questions I raised, which were of a generic business nature and not restricted to the WikiLeaks issue. The issue is that PayPal appears to be an unpredictable business partner, not adhering to its own terms of service when (for whatever reason) it sees fit. That is a serious problem.

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1 thought on “PayPal & decisions on acceptable use

  1. I was a customer of Paypal for many years. Not any longer! Paypal is a company that acts unethically and pretends to be a Bank. What Paypal call “Acceptable Use” is just a cover up, and we all know that. Freedom of speech should not be a crime, not in the USA, or any other country.
    If to be able to publish what our governments are doing is NOT consider “Acceptable Use”, we should not do business with such a company. Bye bye Paypal I hope I’m not alone on this decision.

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