PayPal Says Statement That It Would Fine Users for 'Misinformation' Was 'Incorrect Information'

The online payments company had originally issued a policy update that inflamed conservatives, though the company claims it was ‘in error.’

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A man walks by a large sign with the PayPal logo on it in front of the PayPal headquarters in San Jose, California.
PayPal had to retract a change to its Acceptable Use Policy over the weekend for supposedly fining users for posting ‘misinformation.’ However, conservatives are being very selective in how they interpret PayPal’s AUP.
Photo: Justin Sullivan (Getty Images)

PayPal, the company co-founded by right-wing darling Peter Thiel, was caught in a firestorm of conservative backlash over the weekend for daring to say it would not allow its services to be used to promote misinformation. Now, the company has walked everything back, and further claimed that policy was one big misunderstanding.

On Saturday, several conservative outlets reported that PayPal had updated its Acceptable Use Policy with a notice that starting Nov. 3, the company’s prohibited activities would include “the sending, posting, or publication of any messages, content, or materials” promoting disinformation and hate speech or otherwise causing harm, according to screenshots saved by Mediaite. Those who violated the policy could have been hit with a $2,500 fine against their PayPal account, according to info detailed in the initial AUP changes.

The company retracted the notice over the weekend, and in a statement to Gizmodo a company spokesperson said:

“An AUP notice for the U.S. 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. We’re sorry for the confusion this has caused.”


Of course, PayPal maintains wide controls over user accounts. PayPal mentions in its user agreement that people may be responsible for damages to PayPal for violating their Acceptable Use Policy, likely through a reputational hit or potentially opening up the company to lawsuits. The current AUP mentions that users cannot use PayPal services to sell drugs or promote ponzi schemes, and the added language would have put misinformation in the same category as promoting illegal drug use.

Conservative Twitter was aflame over PayPal’s initial policy update, with users mostly conflating the supposed $2,500 fine with any lies they tell on other social media platforms. Major officials like Federal Communications Commission commissioner Brendan Carr called it “Orwelian” and further argued “This is why it is so vital that state and federal legislatures pass laws that prohibit discrimination by tech companies and protect free speech,” hinting at his own agenda against any and all forms of content moderation on regular social media.

Even former PayPal president David Marcus jumped in to call out his old company.


The whole situation, especially conservative’s take on the AUP changes, is incredibly surreal for multiple reasons. PayPal isn’t a social media company by any stretch, and the policy would have attributed to those who actively use PayPal’s services to promote hate speech or disinformation.

The social media companies that conduct content moderation do not attack accounts for content posted outside their own spheres. This past weekend, Kanye West found that his Twitter account had been suspended, but that was for an antisemitic tweet he posted. Instagram had also restricted the rapper’s account for antisemitic content posted separately on Instagram. The AUP terms would have likely kicked in only if Ye was using PayPal to pay for services that were promoting his drivel.


Of course, even though the company has gone backwards on its proposed policy, right-wing circles aren’t ready to let it off the hook. Some particularly ghoulish right-wing folks called it a case of “cancel culture.”


A few years ago, PayPal CEO Dan Schulman told The Wall Street Journal they were actively working to end payment services for certain companies, particularly bastions of hate speech and conspiracy chucking like Infowars and the Gab messaging platform. Infowars, headed by the human equivalent of a pot boiling over Alex Jones, sued PayPal over his ban through InfoWars’ parent company Free Speech Systems, but later dropped the lawsuit and the case is still in arbitration.

Schulman said there were “those both on the right and left that help us,” mentioning the Southern Poverty Law Center who have brought certain issues to their attention, though the CEO added, “We don’t always agree. We have our debates with them.” Conservatives latched on to this idea that the company takes advice from the SPLC, even though that has no basis in what the CEO actually said.