PayPal backtracks on 'misinformation' fine 2022-10-11    HENG WEILI

PayPal found out over the weekend that mixing politics and business could be bad for business.

The financial tech payment platform, which is based in San Jose, California, said a policy that would deduct $2,500 from accounts of users who spread "misinformation" was released "in error" and would not go into effect.

The company faced a torrent of social media criticism after the policy was published on Friday.

Many on Twitter posted that they had closed or would close their accounts and would switch services. PayPal also owns digital wallet service Venmo.

Then late on Saturday, PayPal Holdings said in a statement: "An AUP (acceptable use policy) 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."

PayPal was to expand its "existing list of prohibited activities "on Nov 3, according to The Daily Wire, which first reported the story. Among the changes were bans on "the sending, posting, or publication of any messages, content, or materials" that "promote misinformation" or "present a risk to user safety or well-being".

Users would be barred from "the promotion of hate, violence, racial or other forms of intolerance that are discriminatory".

The company had originally warned that violating the rule against misinformation and hate speech "may subject you to damages, including liquidated damages of $2,500 per violation, which may be debited directly from your Pay-Pal account".

At least two of the company's former leaders — including Elon Musk — weighed in on Twitter.

"It's hard for me to openly criticize a company I used to love and gave so much to," former company president David Marcus tweeted. "PayPal's new AUP goes against everything I believe in."

"Agreed," Musk, the billionaire CEO of Tesla and SpaceX, replied to the post.

In 1999, Musk co-founded online bank X.com, which merged with Confinity in 2000 to form PayPal. Online auction platform eBay acquired PayPal for $1.5 billion in 2002. It was spun off by eBay in 2015.

Musk, who has restarted talks to buy Twitter for $44 billion, has also expressed a desire to build a super app called X.com.