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PayPal Faces Backlash Over 'Mistakenly Published' Policy that Prohibited Misinformation With a Fine of $2,500 The term in the policy was added in "error," the company said.

By Gabrielle Bienasz

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

It's always important to read the fine print, whether you're an everyday consumer or a fintech giant like PayPal.

On Friday, conservative outlet The Daily Wire published a story on a planned update to PayPal's Acceptable Use Policy or AUP that said it was fining people $2,500 per offense for "promoting misinformation" that could "present a risk to user safety or wellbeing."

Users would not be able to promote, "hate, violence, racial or other forms of intolerance that is discriminatory."

It set off an online firestorm, with people like former president of PayPal and now crypto entrepreneur David Marcus weighing in:

But PayPal said Saturday the policy was a mistake and shared a statement with Entrepreneur via email.

"An AUP notice recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. We're sorry for the confusion this has caused," the spokesperson said.

The company has also been vocal about previous social justice issues. In June 2020, it pledged $535 million to racial justice. But it also has upset conservative groups, such as when PayPal removed (and added back) the anti-trans British free-speech group Free Speech Union, according to the NYT.

The fine issue was bound to be touchy with those who often argue that social media policies unfairly censor them, especially on Twitter — which free-speech absolutist Elon Musk is set to acquire for $54.20 a share if he can convince Twitter he is serious (and not up to more "mischief, as the company put it) and close the $44 billion deal by October 28, per a court deadline.

He said after the original Twitter acquisition that he intended to only prohibit speech not protected by law on the platform. (Hate speech is protected under the law.)

Musk also weighed in on the PayPal controversy. On Saturday, he replied to Marcus' Tweet and said "agreed."

PayPal's acceptable use policy still has a few things you are not supposed to do, including traffic illegal drugs, start Ponzi schemes, hide money in offshore bank accounts, or use it for "the promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime."

Twitter and Meta each have anti-hate policies.

Per The Daily Wire, according to the potential policy update language (which is now not visible on the website), PayPal had "sole discretion" to take the $2,500 fine out of user accounts.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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