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PayPal reverses course, withdraws policy that would have fined users for 'misinformation'

Company says policy change was sent out mistakenly, would have allowed firm to deduct $2,500 from users' accounts as penalty.

Published: October 8, 2022 1:59pm

Updated: October 8, 2022 8:43pm

In a censorship experiment gone awry, PayPal reversed course Saturday night and said it was withdrawing a new policy that would have allowed the company to fine users $2,500 if they spread "misinformation."

The company sent a statement to the National Review saying the Acceptable Use Policy had been sent out mistakenly,

“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," the firm said in the statement.

"Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused,” it added.

The policy lit up social media over the weekend, drawing widespread rebuke even from the company's former CEO.

Until the reversal, PayPal was set to impose the new terms, which laid out a list of policy violations which "may subject [users] to damages, including liquidated damages of $2,500.00 U.S. dollars per violation, which may be debited directly from [their] PayPal account."

Among those violations is any activity that "promotes misinformation," though the company did not clarify what it means by that term. 

Also disallowed are "any messages, content, or materials" that the company dubs, in part, "objectionable." 

The company policy also encouraged users to "immediately" report other PayPal customers for violations of the policy.

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