Author Topic: Paypal: Censors in the name of Profit (Read 14170 times)

wraith808 · « **on:** February 28, 2012, 01:38 PM »

Should censorship in the name of profit and limiting chargebacks by a company with an undisputed monopoly in online payment processing be tolerated?

Summary: PayPal has forced its merchants that publish and distribute e-books to censor erotic literature.

http://www.zdnet.com...-erotic-content/1097

mouser · « **Reply #1 on:** February 28, 2012, 01:42 PM »

what the? why are they doing that? what do they say the reason is? and who decides what's acceptable to them? did they post some kind of standards? i don't see what business it is of theirs to decide what people can charge for -- unless some law enforcement is telling them the books are illegal. I'm a huge fan of paypal, but wtf?

wraith808 · « **Reply #2 on:** February 28, 2012, 01:59 PM »

^ Exactly. Especially in the case of these distributors for a lot of indie authors- all are affected because of any blip, so the distributor is going to err on the side of the many, instead of the few, no matter how they feel about it.

They say the reason is the same as the reason they won't let you use paypal for anything close to porn, including erotic nudity, etc.: because the number of chargebacks is increased on such business. In reality, especially because of the haphazard enforcement, it appears to be censorship masked by fiduciary responsibility.

vlastimil · « **Reply #3 on:** February 28, 2012, 03:37 PM »

Outrageous. I wish someone would fork Bitcoin and fix its problems. We need it SO BADLY.

mouser · « **Reply #4 on:** February 28, 2012, 08:24 PM »

because the number of chargebacks is increased on such business.

that does not sound like an acceptable reason.

mouser · « **Reply #5 on:** February 28, 2012, 08:40 PM »

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.

Read more about the issue:

vlastimil · « **Reply #6 on:** February 29, 2012, 03:45 AM »

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.
-mouser (February 28, 2012, 08:40 PM)

As far as I know, they are already doing this. When you are selling e-content like e-books or software, you are not eligible for seller protection and chargebacks are paid by you (the seller). It has happened to me. Someone bought a license with (presumably a stolen credit card number, because they were saying that they did not buy) and not only that someone kept a software license, but I was charged an additional 10 USD by PayPal...

bastik · « **Reply #7 on:** February 29, 2012, 12:43 PM »

PayPal is expensive (IMO), at least what I could recognize as customer. They should be able to catch the costs of refunds by their fee. Charging more for risky services would be OK. Then it's up the service to decide if it wanna use PayPal.

I also agree that there should be some good alternative, for all sides.

Renegade · « **Reply #8 on:** February 29, 2012, 11:26 PM »

Hmmm... Icky issue...

Still, I find censorship at the payment level completely distasteful. These kinds of things should be at the edge, i.e. at the publisher level.

mahesh2k · « **Reply #9 on:** March 01, 2012, 04:27 AM »

Paypal dispute issue is quite irritating for both sellers and buyers. There are some sellers which are selling crap and get away with the paypal's dispute program. Then there are some buyers cheating the seller by keeping software/ebook and asking for refund as well. My opinion, it is better to use other alternatives instead of paypal if you have too many disputes.

40hz · « **Reply #10 on:** March 01, 2012, 06:35 AM »

Hmmm... Icky issue...

Still, I find censorship at the payment level completely distasteful. These kinds of things should be at the edge, i.e. at the publisher level.

-Renegade (February 29, 2012, 11:26 PM)

There's an argument that what isn't legal or acceptable in the physical world doesn't magically become legal and acceptable when it's put up on the web. Political and thought-crime aside, I find I largely agree with that argument.

I try to use a real-world transform to see if what is happening on the web represents a change, or is just a legitimate and rational extension of an existing meme.

In this specific case, I think there's enough legal precedence and public understanding to not get overly concerned.

Let's go real-world for a minute. Somebody like MasterCard or Amex wouldn't be considered an accessory to an illegal act just because somebody used one of their cards to purchase the means necessary to commit a crime. Or to receive payment for it.

But Mastercard would be considered an accessory if they deliberately courted such businesses (Open a MasterCrackDealer account today!) - or showed a pattern of knowingly and deliberately processing payments for something they had reason to believe was illegal.

So in PayPal's case, yeah...they do have something to be concerned about here.

But it would have been better if they just put their cards on the table and simply said: Look people, there's some stuff going on that we don't want to be involved with. So if you're into that sort of thing you're going to have to get somebody other than us to process transactions for it.

PayPal is a private business. They're not a government agency. They have the right to decide what business they will carry. I don't have a problem with that.

What I do worry about is how pressuring PayPal might open the doors for a convenient way for governments and interest groups to effectively censor materials not quite so broadly offensive as what PayPal is now refusing to handle. Especially when you consider how almost anything you can think of (or do) is likely to be illegal in some part of this world.

Tough call this story. I agree with PayPal not wanting to handle this type of business. But I also fault them for not having the kahunas to originally say what the real reasons for that decision were.

At any rate, this is a potential bellwhether that bears watching because of the opportunity it provides for future legal abuses.

Onward!

wraith808 · « **Reply #11 on:** March 01, 2012, 07:28 AM »

Tough call this story. I agree with PayPal not wanting to handle this type of business. But I also fault them for not having the kahunas to originally say what the real reasons for that decision were.

At any rate, this is a potential bellwhether that bears watching because of the opportunity it provides for future legal abuses.
-40hz (March 01, 2012, 06:35 AM)

I think this sums it up. Their original letter that spoke to all erotic content was a heavy handed approach. If they were targeting things of a specific legality, they should have said it up front. And then they should apply it across the board, not just to small publishers like SmashWords. The second thing I have a problem with is the monopoly in the online payment space. They have actively cultivated said monopoly and because of that, there are few alternatives if you deal in things outside of the realm of their space.

And I can say for sure that this is not just in the space of questionable areas of content, but any areas of erotic content. This case might have been able to be reduced to such- but their TOS censors a lot more than this, and I've always thought this a bit squirrely for a payment processor.

TaoPhoenix · « **Reply #12 on:** March 01, 2012, 07:36 AM »

^ Exactly. Especially in the case of these distributors for a lot of indie authors- all are affected because of any blip, so the distributor is going to err on the side of the *MONEY*, instead of the few, no matter how they feel about it.

They say the reason is the same as the reason they won't let you use paypal for anything close to porn, including erotic nudity, etc.: because the number of chargebacks is increased on such business. In reality, especially because of the haphazard enforcement, it appears to be censorship masked by fiduciary responsibility.
-wraith808 (February 28, 2012, 01:59 PM)

Unfortunately this rendering is also true. : (

mouser · « **Reply #13 on:** March 01, 2012, 09:17 AM »

My instinct tells me that this is NOT at all about about paypal trying to impose their morals and not wanting to traffic in porn or sexual stuff. I suspect this is at heart a business decision.

Now whether it's a business decision based on high numbers of callbacks, or pressure from government, or pressure from community groups, or fears of being sued for or charged with aiding and abetting the sale of illegal content (that would be my guess), I can't say. But these kinds of companies don't have morals in the way that a person does -- it is about the money.

daddydave · « **Reply #14 on:** March 01, 2012, 09:27 AM »

I think the bottom line is Paypal does not want to be a generic money transfer service like Visa or Western Union. For example, from stories I have heard, if you try to send money "just because" or for charity, and they get wind of it, they will reverse the transaction. They started off as just an easy way to buy stuff on ebay, perhaps that explains things somewhat.

wraith808 · « **Reply #15 on:** March 01, 2012, 09:49 AM »

I think the bottom line is Paypal does not want to be a generic money transfer service like Visa or Western Union. For example, from stories I have heard, if you try to send money "just because" or for charity, and they get wind of it, they will reverse the transaction. They started off as just an easy way to buy stuff on ebay, perhaps that explains things somewhat.
-daddydave (March 01, 2012, 09:27 AM)

That might have been true at some point, but from advertisements and e-mail communications that I have received, this is not correct anymore. Did you know that personal transactions between individuals just to transfer money costs nothing? This flies in the face of that explanation.

daddydave · « **Reply #16 on:** March 01, 2012, 10:13 AM »

I think the bottom line is Paypal does not want to be a generic money transfer service like Visa or Western Union. For example, from stories I have heard, if you try to send money "just because" or for charity, and they get wind of it, they will reverse the transaction. They started off as just an easy way to buy stuff on ebay, perhaps that explains things somewhat.
-daddydave (March 01, 2012, 09:27 AM)

That might have been true at some point, but from advertisements and e-mail communications that I have received, this is not correct anymore. Did you know that personal transactions between individuals just to transfer money costs nothing? This flies in the face of that explanation.
-wraith808 (March 01, 2012, 09:49 AM)

Weird. I was just basing it on some horror stories I heard. Seems like Paypal has a few of them.

mahesh2k · « **Reply #17 on:** March 01, 2012, 11:43 AM »

Did you know that personal transactions between individuals just to transfer money costs nothing?

Are you sure about this? I don't get charges for sending money but I get 0.99$+3.5% per transaction as receivers fee from paypal.

vlastimil · « **Reply #18 on:** March 01, 2012, 12:04 PM »

Are you sure about this? I don't get charges for sending money but I get 0.99$+3.5% per transaction as receivers fee from paypal.
-mahesh2k (March 01, 2012, 11:43 AM)

I believe it is true, but you must have the Personal account and there are limitations - the sender may only use their PayPal balance, not a credit card. When you have Premier account or "better" there always is the fee. Supposedly you can have both, but I have never tried it and explaining to donors that "if you have some money on PayPal, use this button, if not use that one" would not be feasible.

wraith808 · « **Reply #19 on:** March 01, 2012, 12:08 PM »

https://cms.paypal.c...ID=marketing_us/fees

TRANSFERRING MONEY
Usually free

Sending money to friends and family is also free for you and the recipient when you fund the transfer with your bank account. You can also use a debit or credit card or make an international transfer for a small fee.

Debit/Credit Card Fee
2.9% of total amount sent plus $0.30 per transaction (the sender decides who pays this fee).

Outside the US
Small fee of 0.5% to 2% (depends on destination) when fully funded with bank account or PayPal balance. 3.4% to 3.9% if paying with a credit or debit card.

mahesh2k · « **Reply #20 on:** March 01, 2012, 01:24 PM »

I have personal premier and I always get fees for incoming money.

wraith808 · « **Reply #21 on:** March 01, 2012, 01:43 PM »

I have personal premier and I always get fees for incoming money.
-mahesh2k (March 01, 2012, 01:24 PM)

You have to explicitly say that it is for a personal transfer. There's an option that you select... I can't remember what it is right now.

wraith808 · « **Reply #22 on:** March 14, 2012, 06:31 AM »

Smashwords PayPal Censorship Update via (Author Steve Perry's Blog)

From Mark Coker, founder of Smashwords:

"Great news. Yesterday afternoon I met with PayPal at their office in San Jose, where they informed me of their decision to modify their policies to allow legal fiction. Effective last night,we rolled back the Smashwords Terms of Service to its pre-February 24 state."

How about that? Now and then, the Forces of Evil lose a round.

Way to go, Mark.