On Saturday, news spread predominantly on Twitter that PayPal’s new policy would authorize them to withdraw $2,500 directly from their users’ accounts if they promoted “misinformation.”
BREAKING: PayPal's new policy authorizes them to take $2,500 from users’ accounts if they promote ‘misinformation’.
“Publication of any messages, content, or materials that, in PayPal’s sole discretion…”
Bitcoin fixes this.
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) October 8, 2022
This seemingly sensational news spread around the web in a matter of hours, triggering a horde of negative reactions.
Many began suggesting that PayPal should be abandoned, and even its celebrated co-founder Elon Musk publicly took a negative view of the news.
— Elon Musk (@elonmusk) October 8, 2022
For example, co-founder and CEO of Llightspark, David Marcus, former head of Facebook’s Libra project, wrote:
“PayPal’s new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity.”
PayPal’s absurd policies and fake news
This uproar had been sparked after an update was posted on the AUP (Acceptable Use Policy) page of PayPal’s official website that explicitly included the promotion of misinformation among the prohibited behaviors for users of the service.
The point is that such hypothetical violations can also be punished with a penalty of $2,500 or less, which is imposed by direct debit from the PayPal account of users who carry them out.
Therefore, the wave of outrage that broke out between Saturday and Sunday is absolutely justified. Only its magnitude and scope can be questioned.
Indeed, the following day, as Yahoo reports, the company backtracked, justifying the incident as a mistake.
They had to admit that they had published an update to the AUP that included the suggestion that PayPal could sanction its users for misinformation, but they also stated that this publication was merely the result of a mistake, and that the company never really intended to do so.
In other words, according to the company’s official statements, one could interpret the incident as the result of an arbitrary action of some employee who somehow was able to change the text on that page at will.
PayPal then also stated that their team was working to correct the policy pages, so much so that the controversial passage no longer appears to be online now.
The fact is that the policy update actually took place, even though it was only a marginal update, and the passage referring to misinformation was removed from it.
For example, the promotion of hatred, violence, racial intolerance or other forms of discriminatory intolerance remain prohibited.
The update will go into effect on 3 November, so it has not actually been changed yet, and the changes have not yet been implemented. For now, only the notice informing users of their services of how the company’s policy will change as of this date has been published.
Among these changes published in the notice, a ban on “sending, posting, or publication of any messages, content, or materials” that “promote misinformation” had also appeared on Saturday.
On their policy pages, it can be explicitly read that violating these rules could have been punished with a penalty of up to $2,500 because the company in such a case would be harmed, so much so that it would have to bear the expense of detecting these violations and dealing with any reputational damage.
Is PayPal’s reputation at risk?
It is worth noting that the company has been tightening its policies and interventions against its own users for some time now.
It certainly has a legal obligation to check, and possibly prevent, its payment services from being used for illicit purposes, but there is more to it than that.
As stated in the statement about the removal of the misinformation breach, PayPal now seems genuinely intent on defending its reputation against uses of its services that could harm it.
While it is difficult to see how misinformation possibly promoted by their users could damage their reputation, it is nevertheless possible to imagine that some professional disinformation perpetrators could be paid through PayPal, for example, and this could indeed damage their reputation should it be discovered and made public.
Indeed, there are real for-profit organizations that produce and distribute online disinformation produced often with the specific purpose of either propagating for instance ideologies or political parties, or simply generating traffic on websites that then monetize it. These are therefore real activities bordering on legality, and should they use PayPal to collect their fees the company’s reputation could be damaged should it become known.
In these cases, there is a major underlying problem unresolved, namely, who decides and how it is done what should be considered disinformation and what should not, although in some specific cases the disinformation is so obvious that it reveals itself.
In other words, should a company like PayPal really decide to combat disinformation, it should also disclose the details of the protocol used to determine when information is to be considered false, and to decide the amount of the sanction.
The risk is that, in the absence of a clear, objective, and public protocol, everything will be left in the hands of some “censor” who, in a more or less arbitrary way, may end up deciding independently what to consider false, and what not.
It should be remembered that by now, especially in the US, there are a number of professional fact-checking services that check information that is published to determine whether it is confirmed, whether it cannot be confirmed, whether it comes from unreliable sources, or whether it is even patently false.
It is therefore an activity that does not decide whether a piece of information is true or false, but seeks to find out which information can be considered as confirmed, i.e., credible, and which is of a dubious nature. In the event that they are, however, it does not mean that they should be considered definitely false, because even unconfirmed or not necessarily credible information in some cases may later turn out to be true.
So on one side, there is the information that can be considered confirmed, while on the opposite side there is the little information that can be considered definitely false, but in between there remains an immense ocean of information that one can neither confirm nor completely disprove. For this reason, fact-checking has enormous difficulty keeping up with the monumental production of fake news that infests the net on a daily basis, effectively leaving it up to users to choose how and whether to protect themselves from this infestation.
For individual users, it is extremely difficult, if not completely impossible, to figure out which information is true and which is not. They are left to simply rely on sources they believe to be reliable, hoping that they have chosen the ones that really are.
However, since there is often a real business behind the activity of producing and distributing fake news, in theory it might be a good idea to target the actual fabricators from an economic-financial point of view. However, there remains the objective, extreme challenge of accurately and timely recognizing all that information that is definitely false, so much so that the only thing that can actually be done is to try to completely stop the production of disinformation by those who do it professionally and for profit.