After PayPal sent out a new policy that announced large fines for users who spread “misinformation,” the online payment company’s stock took a tumble on Monday.
In the midst of heavy criticism, the company claimed the new policy was sent out “in error.”
PayPal had updated its acceptable use policy effective Nov. 3, Mediaite reported Saturday.
The new AUP prohibited users from “the sending, posting, or publication of any messages, content, or materials that, in PayPal’s sole discretion, (a) are harmful, obscene, harassing, or objectionable … are fraudulent, promote misinformation, or are unlawful.”
It said any user who violated these terms could be fined up to $2,500 per violation, with the money possibly coming out of the user’s PayPal balance.
The idea prompted a fierce backlash across social media.
Close your PayPal account now. Their updated AUP (Nov. 3) allows them to deduct $2,500 from your account PER INFRACTION for posting any content they deem to be “disinformation,” or “discrimination” against gender identity, race, etc. If your account is empty, they hit your bank.
— Ian Miles Cheong (@stillgray) October 8, 2022
Just moved all money I had in my PayPal account out of it. And I very must suggest you do the same.
This is serious.
They are delaying the transfer “pending review” for 12 hours. But at least it’s done. #PayPal is dead. pic.twitter.com/Cr1EA1yQjh
— Candace Owens (@RealCandaceO) October 8, 2022
Close you PayPal account. Their new Policy allows them to deduct $2500 from your account for misinformation.
— Tim Kennedy (@TimKennedyMMA) October 8, 2022
David Marcus, the former president of PayPal and current CEO of Lightspark, tweeted a candid criticism of the company’s decision.
“It’s hard for me to openly criticize a company I used to love and gave so much to. But @PayPal’s new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity,” he said Saturday.
It’s hard for me to openly criticize a company I used to love and gave so much to. But @PayPal’s new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity. https://t.co/Gzf8faChUb
— David Marcus (@davidmarcus) October 8, 2022
PayPal co-founder Elon Musk supported Marcus’ criticism with a tweet simply saying, “Agreed.”
— Elon Musk (@elonmusk) October 8, 2022
Republican Sen. Tim Scott of South Carolina threatened congressional action against the PayPal policy.
“Allowing private companies to become thought police would be egregious and illegal overreach,” he tweeted Saturday. “My office will be looking into the validity of PayPal’s new policy and taking any necessary action to stop this type of corporate activism.”
Allowing private companies to become thought police would be egregious and illegal overreach.
My office will be looking into the validity of PayPal’s new policy and taking any necessary action to stop this type of corporate activism.
— Tim Scott (@SenatorTimScott) October 9, 2022
The company tried to put out the firestorm by claiming the AUP update was an error.
“An AUP notice recently went out in error that included incorrect information,” a PayPal representative told Axios on Saturday.
“PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy,” the representative said. “Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused.”
PayPal wants us to believe it was all just an accident when they updated their policy, fining users for ‘misinformation’.
They only reversed the policy after global backlash.
There’s no way that got there in error.
— Avi Yemini (@OzraeliAvi) October 8, 2022
However, it appears the damage was done. The company’s stock dropped to $84.26 early Monday and was at $85.51 as of 2 p.m. ET.
Before the policy controversy, PayPal stock had been around $95 a share. It fell 4 percent late Friday and another 6 percent Monday, Business Insider reported.
The Washington Examiner reported in September that the company and subsidiary Venmo had removed three accounts that were critical of the transgender movement, especially its impact on children.
The accounts of Gays Against Groomers, the Free Speech Union and the Daily Sceptic were removed.
“PayPal has a long-standing and consistent Acceptable Use Policy,” a company representative told the Examiner. “We take action when we deem that individuals or organizations have violated this policy.”
The AUP includes a ban on using PayPal for “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime.”
This article appeared originally on The Western Journal.