A top financial regulator and liberal ally of Sen. Elizabeth Warren said he was considering investigating PayPal for a policy, now retracted, allowing the company to fine users $2,500 for spreading "misinformation."
Consumer Financial Protection Bureau Director Rohit Chopra commented on a recent update to PayPal's acceptable use policy that drew accusations that the payments company was positioning itself to regulate the speech of customers.
"I've never actually never heard of a payment system thinking that it could fine someone for legal expression that their users are making," Chopra said during a Wednesday appearance on CNBC.
Chopra's comments were notable considering his position of authority and close alliance with Democrats. Previously, criticism of PayPal had mostly been limited to conservatives and free speech advocates.
The policy update that elicited blowback had added "sending, posting, or publication of messages, content, or materials that meet certain criteria," including the promotion of misinformation, to the list of prohibited activities that could be penalized.
"We have ordered most of the Big Tech firms for information about how they are making decisions about who they kick off their platforms," Chopra added. "But we also need to look into whether they believe they can be fining users for illegal activity."
While Chopra said that his agency would need to look at the facts of the matter before acting, he believed this to be "new territory" for the agency.
PayPal said that the policy update was an error on Sunday. "An AUP notice recently went out in error that included incorrect information," a PayPal spokesperson said. "PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. Our teams are working to correct our policy pages. We're sorry for the confusion this has caused."
While PayPal has stepped away from the policy, lawmakers have criticized them for it. Sen. Tim Scott (R-SC) said he would investigate the matter further. The company's stock has also dropped in value while searches for how to delete PayPal have escalated since the Sunday announcement.
Chopra is considered a close ally of Warren due to his previous work at the CFPB, which she proposed and helped set up, before being appointed to the office by President Joe Biden.
The payment platform removed accounts operated by two U.K. organizations run by a social commentator over alleged hate speech earlier last month. The accounts were reinstated days later.
https://www.washingtonexaminer.com/policy/technology/paypal-penalties-misinformation-new-territory-cfpb-director....
Many on social media promised to delete their paypal accounts after their PYPL's controversial announcement to fine users $2500 for misinformational comments.
Hopefully everyone that canceled their paypal account will search for crypto alternatives to fill the gap instead. Paypal's bold move may have done some good for crypto mass adoption during a time when it was most needed. Isn't it interesting how these aggressive and heavy handed moves have a tendency to produce a backlash.
Depending on the severity of the outcome, it is possible paypal may face fines from regulators. Some sources claim such a move is possible, if unlikely.
Paypal's stock remains down near to $10 since before its announcement was made before being retracted.
