Ok so some clarification, from
http://www.the-digit...cumbs-to-censorship/ makes it clear that it's not (just) about chargebacks but about "obscenity" and paint paypal in a slightly more favorable light:
On Saturday, February 18, PayPal’s enforcement division contacted Smashwords with an ultimatum. As with the other ebook retailers affected by this enforcement, PayPal gave us only a few days to achieve compliance otherwise they threatened to deactivate our PayPal services. I’ve had multiple conversations with PayPal over the last several days to better understand their requirements. Their team has been helpful, forthcoming and supportive of the Smashwords mission. I appreciate their willingness to engage in dialogue. Although they have tried their best to delineate their policies, gray areas remain. Their hot buttons are bestiality, rape-for-titillation, incest and underage erotica.
And then:
I had another call with PayPal this morning. Our conversation is continuing with them as I seek to achieve a less onerous, more sensible result.
There’s a sliver of hope that I might be able to obtain a more positive, less restrictive outcome than I communicated on Friday, yet it’s unlikely we’ll achieve the true result I want (no censorship) in the near term. Today, PayPal hinted at a more relaxed definition of prohibited content as, according to them [I'm paraphrasing], “prohibited books would be those for which rape, bestiality and incest are the major theme. If rape, bestiality and incest are incidental plot points, then that content might be allowable.”
This represents a significant clarification in our ongoing attempt to delineate the gray areas and push back the onerous, unfair and restrictive definitions as they now stand. It’s an opening, but it’s not the final word from PayPal. Our friends at PayPal are trying their their best to help Smashwords authors and publishers.
More importantly, the complaints about censorships are complaints that paypal is pressuring the publisher smashmouth to make changes to censor their authors.
And the publisher does indeed start by saying: "Like many writers, censorship of any form greatly concerns me."
However, as he does talk about some of the other areas that they are now forbidding, it's clear the publisher has decided they don't want to publish some of this stuff. On rape and bestiality:
"I don’t want to publish it, sell it, or distribute it. The TOS is now modified to reflect this."
So it's clear that at least some of the new resitrictions (aka censorship) are coming from the publisher's desire to stop publishing certain kinds of books.
A comment about the "higher chargebacks" issue -- I really don't know that I believe that -- it sounds like an excuse on paypal's part to me and bullshit. However, if it is true, the point they seemed to be making is that *THEY* eat costs from such chargebacks because mastercard/visa charge them when that happens. If this *is* really the case, I think the solution would be to pass on those charges to seller rather than ban the content.
SO..
As usual the real issues are a little more nuanced than our first reactions. I'm not saying it's right, I'm just saying life is more complicated than it first appears, and paypal is not being as evil as was first suggested.
Having said that, I do think it's really important that people pushed back and continue to push back against any pressure from middle man companies like paypal to influence content. And it certainly does appear that we saw the standard thing where a company (paypal) overreached and tried to pressure a small company to do something that was only overturned/adjusted when enough people complained that the policy was not evenhanded or applied fairly. We see this pattern all the time -- the big guys play fast and loose with rules when dealing with small fish until someone can raise enough of a rebellion to get them to act properly.
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