Tell Paypal To Stop Playing Morality Cop With Booksellers

from the let-payments-go-free dept

We recently wrote about how Paypal was pressuring Smashwords to drop any books that included sexual content that Paypal didn’t like. This seemed ridiculously over-aggressive. You can be completely against rape without that meaning that no books shall exist that include a rape scene. But according to Paypal’s rules, books that include themes around rape, incest and bestiality — even if such books were there to raise awareness around those things, not to encourage them — simply were not allowed. Smashwords claims that Paypal is passing the blame on to the credit card companies, but others have questioned how accurate that really is. And, even then, it seems that Paypal should stand up to the credit card companies if that is, indeed, the case.

In the meantime, the EFF has put together a letter writing campaign to tell Paypal to stop censoring books:

Recently, PayPal gave online publishers and booksellers, including, Smashwords, and eXcessica, an ultimatum: it would close their accounts and refuse to process all payments unless they removed erotic books containing descriptions of rape, incest, and bestiality. The result would severely restrict the public’s access to a wide range of legal material, could drive some companies out of business, and deprive some authors of their livelihood.

Financial services providers should be neutral when it comes to lawful online speech. PayPal’s policy underscores how vulnerable such speech can be and how important it is to stand up and protect it.

The topics PayPal would ban have been depicted in world literature since Sophocles’ Oedipus and Ovid’s Metamorphoses. And while the books currently affected may not appear to be in the same league, many works ultimately recognized for their literary, historical, and artistic worth were reviled when first published. Books like Ulysses and Lady Chatterley’s Lover were banned as “obscene” in the United States because of their sexual content. The works of Marquis de Sade, which include descriptions of incest, torture, and rape, were considered scandalous when written, although his importance in the history of literature and political and social philosophy is now widely acknowledged.

You can go to the link above and add your name to the campaign and let Paypal know that this is not the role of a payment processor.

Of course, what this story is really highlighting is just how ridiculous it is that there are choke points like Paypal who can solely dictate morality based on their own views of what is and what is not art. What we need are a lot of alternatives, so that if Paypal makes decisions like this, people can simply route around them.

Filed Under: , , ,
Companies: paypal, smashwords

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Tell Paypal To Stop Playing Morality Cop With Booksellers”

Subscribe: RSS Leave a comment
kenichi tanaka says:

This is hilarious. It’s not Paypal. Come to find out that the Credit Card companies demanded that Paypal stop allowing the sale of adult entertainment, erotica, etc.

Credit Card companies/banks are constantly having to refund a purchase because some dude who is married has ordered porn on his credit card and his wife finds out about it. So, he tells his wife that someone must have acquired his credit card number and brushed it off as credit card theft.

Credit Card companies are finally putting their foot down and preventing third party payment services from allowing businesses to allow credit card payments through Paypal to pay for pornography.

Blame these married men for ordering the porn.

Anonymous Coward says:


They have the right to deny services to whoever the hell they wanted. Welcome to private industry. What gives anyone the right to interfere in that? If this is really an issue, the solution is for someone to create another payment processor that isn’t as stringent. Same as web hosting: plenty of ISPs have terms of service that prohibit any content they consider obscene, even if it’s legal. Plenty of ISPs don’t. Choice exists. If no choice exists here, the solution is to create choice. If government laws and regulations are preventing it, the solution is to remove or rework those laws. If you want to force service companies to provide services to everyone, you’re far worse than the “morality police” you claim they are.

Anonymous Coward says:

“here are choke points like Paypal who can solely dictate morality based on their own views of what is and what is not art.”

Paypal has the right to refuse business to anyone provided that they apply the same standards to all (no discrimination). They cannot be forced to do business with anyone, they are a private company.

EFF needs to wake up on this issue, they are have been lulled to sleep by Generation Entitlement.

Kenny Jacobson says:

kenichi tanaka has an interesting point. I like that.

This is my first time commenting, because usually I tend to agree with you, Mike…but in this case where it is NOT the government prohibiting free speech, nor is there a government-protected monopoly prohibiting free speech, then I’d side with the business. They should be free to conduct lawful business however they chose. And yes, let more alternatives spring up and take the business that Paypal does not want. Isn’t that the free market approach?

I guess you could argue that joining the campaign against Paypal’s practice is also part of the free market. And I would agree, BUT…after spending so much time educating/urging friend/family/facebookfriends to fight SOPA/PIPA, I’m afraid my voice would just become white noise if I took up every cause, you know? I like to choose my battles wisely, and this one just seems like it can work itself out on its own.

Anonymous Coward says:

Paypal has a total and complete monopoly in the online payments segment.

The fact that a website/business has to literally consider shutting down if Paypal shuts off payments for it is insane.

I can buy any sort of filth with my credit cards, who exactly is it paypal claims to be catering to in these cases?

Who is behind paypal? How and why does morality even come into play? If it’s legal, surely you should be able to use paypal for it.

I still don’t understand how every credit card company + paypal is able to shut off donations to wikileaks (A completely legal non-profit, until proven otherwise) without any sort of ramifications.

Payment processors should NOT hold this key. It’s too powerful. If you’re a payment processor and it’s legal you should be legally required to provide your services, otherwise what’s to stop these gatekeepers from arbitrarily shutting down businesses they simply don’t like?

Chargone (profile) says:

Re: Re:

actually, there are alternatives, they’re just not commonly used (and they’re probably more difficult for the vendor to set up, i suppose)

Gamersgate, for example, (online game store) uses Moneybookers.

then there’s a number of sites that deal directly with the credit card companies so far as i can tell.

the ones you Cannot bypass, generally speaking, are the credit card companies. (well, unless both you and the vendor are willing to faf around with direct payments and all the issues those bring, or money-orders (or some equivilant) which, in most cases, aren’t worth it because the fees are greater than the cost of the thing you’re buying. (at least if you’re ordering from overseas and thus require currency conversion as well.)

The Buzz Saw (profile) says:


I find myself in an interesting position. I am a Christian husband and father. Given my religious background, I certainly oppose such vile literature. One could argue that I see this as a ‘win’ for me and my beliefs. However, this is exactly the wrong way to go about it. If I wanted to eliminate such literature, I’d seek to garner support from people in the community. I’d want the world to WANT to rid itself of such literature. Paypal should strive to be as neutral as possible as it is a tool for moving money around. What people do with their money is their own business.

Paypal, why stop at dirty books? Why not cut off funds to presidential campaigns (for candidates you do not like)? Why not cut off funds for anyone who refuses to detail what the transaction was for? Do you plan on reinstating Smashwords for transactions not involving dirty books?

It’s such a slippery slope that this really is a victory for no one. It’s just one more reason for me to move my assets away from Paypal.

Chargone (profile) says:

Re: Re:

i’m continuously baffled that ANYONE uses paypal after reading their TOS.

it explicitly states (or did last i read) that you are buying paypal credits from them. that is the transaction. they then have no obligation to do ANYTHING, including refund your money if you decide to cash out. the transaction is Done.

their contracts with the vendors may make this a bit less insane, but from a consumer stand point that is Nuts.

they’re not just processing a transaction for you. they are taking your money and then you are Trusting Them to spend it on the stuff you ask for. their only obligation to do so is that if they screw over enough customers people stop giving them money anymore.

… … …

i’m not sure how they got any customers in the first place with that set up

Anonymous Coward says:


“Paypal, why stop at dirty books? Why not cut off funds to presidential campaigns (for candidates you do not like)?”

The difference there is that it is discrimination, by excluding one candidate and not the other. What Paypal is doing isn’t censorship or discrimination, because they are declining an entire segment of business, not a single company or individual.

Paypal could decline to process for ALL political parties, and that would also not be censorship or discrimination.

Anonymous Coward says:

This seems a hypocritical stance to take, when compared with the fallout from Rush Limbaugh’s stupidity – all those advertisers leaving because they disagreed with *his* morality stance.
Much as I object to paypals actions in this case; at least they have the option of being moral; regardless of how much I disagree with their stance *here*.
I’m not too sure we really want a world where morality is entirely stripped from all entities.

John Fenderson (profile) says:


Come to find out that the Credit Card companies demanded that Paypal stop allowing the sale of adult entertainment, erotica, etc.

I don’t believe it. Credit card companies have no problem with people using their cards to buy such things in any other venue.

Credit Card companies are finally putting their foot down and preventing third party payment services from allowing businesses to allow credit card payments through Paypal to pay for pornography.

Yes, because that makes a lot more sense than simply refusing to do the chargeback without an investigation. An investigation that would result in fraud charges against the person falsely claiming fraud.

Blame these married men for ordering the porn.

Why only married men? And why should I blame them instead of the people actually making the decisions?

DOlz (profile) says:


“The difference there is that it is discrimination, by excluding one candidate and not the other. What Paypal is doing isn’t censorship or discrimination, because they are declining an entire segment of business, not a single company or individual.”

It is censorship and discrimination because they are deciding what is and isn’t a “dirty” book. Are the two books mentioned in the article (Sophocles? Oedipus and Ovid?s Metamorphoses) and other (that at one time were considered) questionable books considered cause them to denied companies selling them access? If the answer is no then it by definition censorship and discrimination.

Paypal as a private company can take this stance, but don’t claim they aren’t using their market position to dictate public policy.

TtfnJohn (profile) says:


These would be the same credit card companies that process orders from porn sites, I guess.

You and others are right to say a business is allowed to decide for itself what goods and services to sell but having made that decision to then assume the role of censor (on this hand we have PayPal and on this hand we have credit cards) is a bit much.

As for the married men who ordered the porn on their own just what in ANY credit card agreement allows them to try to argue that the transaction be reversed because the wife found out. The married man still has the files he ordered.

bblevins (user link) says:


I agree, who in the f… gave anybody the right to judge, it sounds like, and on unfair biased opinions. Obviously they’re using hospitality as a scam to make money because thats how those folk grew up. Or getting hurt theyre whole life; its all they know. losers. Im laughing because of all this crap and god judges, not controlling losers who cant make it n e other way. bye everybody. i needs a job! not including peoplesitting and waiting for a command.

MikeVx (profile) says:

Alternative payment systems do exist.

Dwolla, for one, Venmo is concentrating on person-to-person at the moment, but has plans to expand. Personally, I think that having a variety of players is a good idea, it might just push existing poorly-behaved incumbents to clean up their acts.

I am getting involved in a number of these alternative systems so that I have options. I am also encouraging merchants to look at these alternatives by letting them know that I do not regard PayPal as an option, and routing credit cards through them counts.

The major point here is that for alternatives to get going, people have to be willing to try them. My Android phone is accumulating all manner of money-transfer apps. Look into the options, and use them when you can. If you mention your options to others, they may look into these other systems. I’m making the effort to open things up. How about some of you join me?

Chargone (profile) says:

Re: Re:

if i understand it, dodgy behavior by customers makes such sales higher risk for the credit card companies, so they impose an extra fee on vendors of such to compensate.

paypal doesn’t want to pay the extra fee, so to avoid it forbids it’s clients from selling such at all.

each step is quite reasonable. the problem is poor definitions combined with paypal’s general dominance of the payment processing market.

still a dick move overall though.

Dave Zan (user link) says:

To those questioning what gives PayPal the “right” to essentially become a moral police, they’re not. They’re only deciding what people can do using THEIR stuff, just like you can decide what others can do using YOUR stuff as well.

By the way, PayPal also finally spoke up on the subject:

Here are the facts. Unlike many other online payment providers, PayPal does allow its service to be used for the sale of erotic books. PayPal is a strong and consistent supporter of openness on the Internet, freedom of expression, independent publishing and eBook marketplaces. We believe that the Internet empowers authors in a way that is positive and points to an even brighter future for writers, artists and creators the world over, but we draw the line at certain adult content that is extreme or potentially illegal.

An important factor in our decision not to allow our payments service to be used to purchase material focused on rape, incest or bestiality is that this category of eBooks often includes images.

This type of content also sometimes intentionally blurs the line between fiction and non-fiction. Both these factors are problematic from a legal and risk perspective.

So the business risk associated with this content forms the basis for our policy, which has been in place for many years. Some feedback we?re getting is a belief that PayPal is forcing its moral beliefs on others and restricting people?s right to free speech. We can tell you with 100 percent conviction that this is not our intention. While we understand that people don?t always agree with our policies, this decision has nothing to do with our personal views on the content or any desire to limit free-speech rights. It has everything to do with running a sound business and complying with our legal responsibilities.

PayPal is a payments company. The right to use PayPal?s service is not the same as the right to speak.

We have not shut down the e-book publishers and are working with the small number of affected merchants to come to a mutually agreeable solution that allows maximum freedom of expression, while protecting PayPal from the brand, regulatory and compliance risk associated with this type of content.

We hope that our customers enjoy the services and features that we work so hard to get right and understand that our policies are simply a way to conduct business in a fast-paced world.

Naturally, others disagree. But at least they finally spoke up on the issue.

Dave Zan (user link) says:


but having made that decision to then assume the role of censor (on this hand we have PayPal and on this hand we have credit cards) is a bit much.

While it may feel that way, what some people have been saying is that PayPal can only censor THEIR stuff. Yet, others insist they’re moralizing or whatever when PayPal CAN’T STOP YOU from using another provider (which there are such as AFAIK) or even buying one in your neighborhood bookstore who sells that, if any.

It so happens that PayPal’s the most popular online payment provider, but – again – they’re NOT the only one. I realize why some people feel this way, but I don’t honestly get why they keep insisting on things that aren’t FACTUALLY or REALISTICALLY true other than maybe being emotionally passionate about it.

A funny thing to this is we actually have that same power to censor anyone who uses OUR stuff. If we can do that, why not companies like PayPal as well?

Sorry to capitalize certain words, by the way. The font’s just too small to put in bold only to emphasize something. 🙂

Anonymous Coward says:


No, again, it’s not censorship, because the sellers are free to keep selling them – but they cannot force Paypal to be part of that business – that is paypal’s choice.

The only “censorship” is one that the seller imposes on themselves, by selecting certain business partners who do not support all of their activities.

Anonymous Coward says:


“I don’t believe it. Credit card companies have no problem with people using their cards to buy such things in any other venue.”

Try to buy porn with your American Express. Good luck.

Paypal isn’t doing “high risk” processing, and they are not getting charged that sort of premium from Visa and Mastercard. If the merchant wants to resell, they should get their own credit card accounts and accept it that way, or go to one of the “high risk” IPSPs and work with them.

Paypal doesn’t do this type of business, and doesn’t do it for anyone. They need to understand that and move on. It’s not Paypal’s “fault”, and we cannot force them to do business with anyone.

John Fenderson (profile) says:

Re: Re:

Try to buy porn with your American Express. Good luck.

No luck needed. AmEx has no problem with such purchases.

Paypal doesn’t do this type of business, and doesn’t do it for anyone. They need to understand that and move on. It’s not Paypal’s “fault”, and we cannot force them to do business with anyone.

So you’re implicitly confirming my assertion: that this is PayPal’s decision and not the CC company’s. So it’s Paypal’s “fault”.

Nobody is talking about forcing Paypal to do anything, so I’m not sure why you feel the need to make that comment. However, it is the right and duty of every consumer to avoid doing business with companies whose policies we disagree with, and to make it known that we’re doing so. Public complaint and even ridicule is an important part of our system.

If someone feels strongly about this, they should absolutely stop engaging in Paypal transactions.

Davey says:


Where do you get this crap? The phone company doesn’t have a right to decide what you can say on your phone calls. The electric utility doesn’t get to tell you you can’t use their power to campaign for a politician they don’t like.

But tell, do paypal/visa/mastercard, in your mind, have a right to refuse to send money to politicians who are investigating their price fixing? Gay rights organizations? The NRA? Christian Scientists? Mormons? Does the government have the right to tell you what you can buy with the cash they printed?

These companies are public utilities, which have always been “forced” to provide equal treatment. ISPs are the exception, not the rule.

But in one sense, you’re right: paypal and credit card issuers have been allowed to co-opt the Constitutional mandate that the government issue the currency. Now that bits and bites are replacing dollars and cents, it’s past time for the government to update its legal obligations and start issuing electronic currency.

Davey says:


If paypal (and the banks behind them) have this kind of power, that power needs to be ended. That’s what government is for. Censorship is censorship, whether it’s done by government or “private business”. The real problem, though, is the credit card companies. They have acquired the power to deny people airline tickets, rental cars, and use of Net vendors if they choose to shut down a customer for “bad morals”. That’s what has to change. Either they’re public utilities or they’re illegal monopolies. Either way, the law has to be enforced.

Anonymous Coward says:


They aren’t monopolies, that is the key. You have other payment options available, including cash, wire transfers, checks, bank drafts, money orders, western union, and so on.

They are not a monopoly, they are a convenience.

Honestly if there was enough money in this, someone would fill the need. But on a risk / reward stand point, nobody wants to touch it, at least not at normal rates.

Chargone (profile) says:

Re: Intriguing

most of which are NOT available for the vast majority of online transactions.

in fact, the use of Cash for international transactions would require spending thousands of dollars extra to actually Travel to pick up the $20 dollar item, or violating the postal system’s rules. (seriously, sending cash is one of several things that will immediately cause them to disclaim all liability for the contents of the package.)

almost NO ONE (and certainly no business with a fixed premises) takes cheques anymore: debit cards have replaced them. (to the point where we can now get debit cards here which are compatable with the online credit card processing system, essentially merging the two systems). bank drafts and money orders entail insane fees for international transactions due to currency exchange. … i’ve barely even Heard of western union and would have a clue how to go about arranging a wire transfer (though i suspect i could just go down to the bank and Ask about that last one.)

simple fact is: most of those are impractical to impossible for international transactions, and NONE of them are viable when dealing with unknown parties due to the likelihood of non-payment/failure to deliver.

the credit card companies DO serve a useful purpose here (buffer against scams + third party transaction records)
(i’ll note that using a Debit card through there system has different terms and such. you’ve got to respond to things a lot faster to get your money back, for example, and, of course, being tied directly to your bank account rather than ‘credit’ your money leaves the moment you pay for things so you Are out the cash for the duration. on the up side: meaninglessly small yearly fee and no interest payments.)

problem is, the credit card companies are too powerful, too few, and owned by members of the same small group of elites who keep screwing everyone over.

paypal’s business practices (hell, just their TOS were bad enough to keep me away as a Customer, nevermind if i were to be a vendor) are bad enough that i fail to see why anyone informed would deal with them, but they’re not really the problem in the system, as such. if they go splat, the only down side is the ONLY thing forcing them to actually give people their money is that failing to would lose them the good will required to have other people give them MORE money. legally speaking the ‘transaction’ is them selling you paypal credits. they can do whatever the hell they want after that and your protections are extreamly limited. (and it should be noted that that need for good will is NOT enough to stop them regularly screwing over vendors and other people who actually depend on their service. just not in an in bulk, take the money and run kind of way)

so, yeah, Paypal is terrible. but they’re not the Problem, exactly.

the credit card companies, on the other hand… a useful, meaningful, VIABLE alternative is required.

and that requires getting both banks AND VENDORS to cooperate and use it, among other things. (and given that the people who own the banks, or in some cases the banks themselves, own the credit card companies…. good luck with that.)

RemittanceGirl (user link) says:

Credit Card Companies

Well, actually, it’s certainly not Visa. The 75 member coalition of writers, readers and publishers at wrote Visa a letter asking for confirmation on their policy and their actions with regards to paypal.

They categorically denied having anything to do with it. The letter is reproduced here:

Ms T. (profile) says:


No Dan, Paypay is trying to decide what to do with MY money and that is the issue. My credit card doesn’t tell me where I can swipe it and neither does my bank card.

Paypal isn’t even sure about it’s own terms hence their trying representatives trying to work with Mark Coker of Smashwords.

The blog sent out by Mr. Nayar said nothing. It has as much value as a pinch of gnat turd. It is filled with lies, i.e. I can buy ALL sorts of erotica on Ebay right now. Much of it containing the “potentially illegal” subject matter contained in that blog post. If this wasn’t a deliberate attack on independent authors and publishers, or an attempt to push a moral agenda I would call it one of the greatest corporate Oopsie’s of all time.

Before you try and defend a position on a subject you know little or nothing about please spend a tad bit more time making yourself aware.

Chargone (profile) says:

Re: Re:

actually, no. at least according to the TOS last i read it.

technically, what you did with YOUR money was buy paypal credits.

you’re now using paypal credits (your allocated use of what is now Their money…) to buy stuff.

in their TOS they were under no obligation to do ANYTHING beyond sell you those paypal credits save that if they screw over too many people too often too close together they lose customers.

which is why after READING the TOS i stayed the hell away from paypal.

note they MIGHT have changed this since then. it’s been a while. worth looking into, at least.

sporkdelis (user link) says:


The problem is that there are no other companies claiming that PayPal is telling them the same thing. Why hasn’t Itunes had this same letter sent to them? They carry titles that depict these things, and they also use PayPal. I would say that it looks like PayPal is only going for the people they know they can bully. All of the companies are small internet based companies with little ability to go around them.

Seriously, try using one of these “alternatives” just to sell your own stuff, then think about moving thousands of people’s payments over to that as well. Even if you managed this monumental task, no one would buy off of it. Why? Because PayPal has all of the public’s trust. No one knows about Payoneer, or Dwolla or anything else. Try getting someone who has never been to your site before to sign up for one of these things and give over their credit card numbers. How about someone who just bought an ereader and only ever uses a computer for email? It aint gonna happen!

People keep trying to say that PayPal doesn’t have a monopoly, and I argue against that. They absolutely have a monopoly on public trust. People are not as worried about using PP. If it’s online I have to really think about if I want to buy something on a site withput paypal, because I knnow that they will do things right.

The fact that they tried to pass the buck says that they do know that they’ve been caught. They thought that these companies would be scrambling to remove the content as if they didn’t realize it was there, or as if it was actually illegal like all of the file sharing sites that were taken down recently. Unfortunately for PayPal, the heads of these companies know what is and is not illegal, including their right even to suddenly change their policy (if that were the case) to exclude anything as long as it isn’t discrimination against a legally protected group.

We have a right to tell them that they don’t have a right to censor, whether they do or not.

No matter what they’re the idiots who opened their big mouths NOW. This is the absolute worst time to suggest any kind of censoring, even if they had some sort of catastrophe involving beastiality porn. They should have waited a month at least. Regardless of their reasons they look like complete idiots. If they have a really good reason, they should explain in detail, because something must have happened if they decided to enforce this policy so suddenly.

Chargone (profile) says:

Re: Intriguing

paypal has been known to censor sales of the bible due to the seller not being registered as exactly the right type of religious institution and the thank you note on the receipt for the customer including the word ‘jesus’ before.
(specifically, they froze the account of the non-profit organization which was distributing bibles for a thank you message sent to people who gave them donations For This Purpose. it took MONTHS to sort out, froze up their entire operating budget, at a time when they were, from memory, having problems with the government in the area they were in. it was begining to cause problems with their food supply by the time paypal stopped being dicks and acknowledged that the simple solution was to correct the records. again, this is from memory and it WAS a while ago. (a Better solution would have been for paypal to not be arseholes about it in the first place, but still.))

Dave Zan says:


Actually, they already explained why in their blog that I linked here. Just that they’re expecting people to disagree with them, anyway.

Indeed you and everyone else has the right to tell them they don’t have a right to censor. Alas, they also have the so-called right, privilege, whatever one wants to call it to decide for themselves what they can do with the stuff they control directly.

An arguably good thing, though, is one isn’t bound by any law – cosmic or otherwise – to use them. Sure they’re the most popular payment platform around, but again they’re not the only option around.

Sometimes you just have make the most or best of an arguably bad situation.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...