Authors Can Sleep Easy Now; Paypal Reverses Its Censorship Decision

from the freedom-of-expression-is-not-dead dept

Just last week, we learned PayPal had implemented policies that would limit the types of erotic fiction ebook publishers could sell. This sparked quite the discussion and outrage among those not just interested in protecting erotica, but also interested in preserving the freedom of authors to publish what they want. Among this commotion was a number of movements to put pressure back on PayPal to stop them from implementing these policies. We now know that these efforts have paid off. Mark Coker of Smashwords announced that PayPal has changed its position and will continue to allow the sale of legal fiction through online ebook publishers.
In a victory for free speech, PayPal today announced plans to revise their content policies to allow Smashwords writers full freedom to publish and sell legal ebooks.

This is a victory for all writers and readers. It removes credit card companies, banks and payment processors from the business of censoring legal fiction. It creates a new precedent that should allow other payment processors who have previously discriminated against legal fiction to relax their policies.

It will make more fiction more available to more readers. It gives writers greater freedom to express themselves. It gives readers more freedom to decide what they want to experience in the privacy of their own imagination.
In addition to Smashwords' comments, PayPal went to its blog to publicly explain what this new policy means for ebook authors and readers.
First and foremost, we are going to focus this policy only on e-books that contain potentially illegal images, not e-books that are limited to just text. The policy will prohibit use of PayPal for the sale of e-books that contain child pornography, or e-books with text and obscene images of rape, bestiality or incest (as defined by the U.S. legal standard for obscenity: material that appeals to the prurient interest, depicts sexual conduct in a patently offensive way, and lacks serious literary, artistic, political or scientific value).
Under the new policy, only books with graphic images that fall under the US based Miller test will be affected. Going forward, PayPal will also be taking a more targeted approach to enforcement. Instead of focusing on entire classes of fiction, it will work on a book by book basis. This specific change should allow for a better process in which the affected authors can appeal the decision to remove their works while getting the individual focus such decisions deserve.

Just as has been seen with SOPA and ACTA, this decision by PayPal came about because the wider internet community came together to protest PayPal's earlier decision. As Mark describes in his blog post, it was the efforts of several advocacy groups, authors, bloggers, petition signers and the letters and phone calls from everyone that made this happen. This is the power of the digital culture we all share. We have the ability to change policies for the better of the world. I look forward to seeing what else is possible.


Reader Comments (rss)

(Flattened / Threaded)

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    Anonymous Coward, Mar 15th, 2012 @ 4:36am

    So was it Wikipedia or Google who forced Paypal to change their plans!?

     

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      Anonymous Coward, Mar 15th, 2012 @ 4:54am

      Re:

      It was Fairies and Unicorns.

       

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      Planespotter (profile), Mar 15th, 2012 @ 5:12am

      Re:

      Well it was the fairly large public backlash against the plans that caused Paypal to change their minds... but Politicians and large international conglomerates will probably just blame Social Network companies, without understanding that they are just platforms for large groups of people.

       

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    John Doe, Mar 15th, 2012 @ 4:55am

    The good with the bad

    While I don't care for the types of fiction being protected here, I am glad to see them being protected. It is bad enough that our government acts like our parents, we don't need corporate masters too.

     

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      Anonymous Coward, Mar 16th, 2012 @ 2:16am

      Re: The good with the bad

      "Not only is it extremely cruel to persecute in this brief life those who do not think the way we do, but I do not know if it might be too presumptuous to declare their eternal damnation." -- Voltaire, in Treatise on Toleration

      More popularly (and concisely) paraphrased:

      "I disapprove of what you say, but I will defend to the death your right to say it." -- Evelyn Beatrice Hall (n.d.p. Stephen G Tallentyre), in The Friends of Voltaire (1906)

      Timeless words, forever relevant.

       

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    Anonymous Coward, Mar 15th, 2012 @ 5:05am

    The got SOPAd.

     

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    Planespotter (profile), Mar 15th, 2012 @ 5:13am

    I'm confused... I thought the whole reason for withholding services was because they were forced into it by credit card companies?

    Was that a lie?

     

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      TheStupidOne, Mar 15th, 2012 @ 11:10am

      Re:

      Probably. They said the problem was men getting in trouble with significant others when erotica shows up on the credit card statement. But I've never had the name of a book I purchased show up on a credit card statement (I haven't bought from Smashwords though) and the times where I purchased things that a wife/girlfriend would object to, the name was cleverly disguised but still identifiable if you knew what your purchases were. So this was probably just Paypal acting like morality cops.

       

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      John Fenderson (profile), Mar 15th, 2012 @ 2:26pm

      Re:

      Yes, and an extremely transparent one at that.

       

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    Anonymous Coward, Mar 15th, 2012 @ 5:22am

    But wait! There's more!

    Another trial-run of direct commercial censorship, with mere fictional writing as its target, perpetrated by the corporate money-handlers against a seemingly uncontroversial and defenseless victim, sputters and dies with an embarrassingly loud farting sound. Upon whom will the next round of direct corporate censorship be inflicted? And under what guise? Perhaps protecting citizens from the horrors of family planning? Or mistakenly voting for an independent candidate for some political office? If it takes money to buy political (and apparently other forms of) speech, what slippery slope is this taking us down, and what unseen hand is doing the steering?

    Wikileaks was, perhaps, the first overt censorship target of the payment processors. Wikileaks stepped on some very sensitive, already-bullet-riddled toes, and received exactly the type of beat-down one would expect when the apparent fools are powerful politicians who can't invent any realistic prosecutable offenses on short notice.

    Inquiring minds want to know: Whose hand was in the sock-puppet this time?

    The storm gathers...

     

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    Stig Rudeholm (profile), Mar 15th, 2012 @ 6:33am

    Good. Censoring what is "extreme and potentially illegal" is a Very Bad Idea(tm).

    Extreme is in the eye of the beholder, and PayPal does not get to decide what is legal and what is illegal.

     

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    ASTROBOI, Mar 15th, 2012 @ 6:33am

    Looks like they didn't change all that much.

    Let's see. We ban anything that smells of CP. So, does that include Lolita? Anything appealing to the purient interest. Well thats just about any porno tape, dvd, book or story. Then there is good ol' Beastiality. Now thats always been a really big problem. So can they forbid Beauty and the Beast? They didn't specifically include necrophilia but I'm sure that would come under "depicts sexual conduct in a patently offensive way" so I guess they are free to forbid Snow White. Hey didn't the Handsome Prince kiss what he thought was a corpse? Paypal can still give anybody a hard time if they wish to do so. Their vague definition could be applied to a big section of the local public library. The Paypal philosophy has only ever been the same as that of an arrogant, insecure sociopathic middle school principal. Plus they can't stand to see anybody do a deal where PP makes less than the seller.

     

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    Ben (profile), Mar 15th, 2012 @ 6:39am

    Is this really any different?

    First and foremost, we are going to focus this policy only on e-books that contain potentially illegal images, not e-books that are limited to just text. The policy will prohibit use of PayPal for the sale of e-books that contain child pornography, or e-books with text and obscene images of rape, bestiality or incest (as defined by the U.S. legal standard for obscenity: material that appeals to the prurient interest, depicts sexual conduct in a patently offensive way, and lacks serious literary, artistic, political or scientific value).
    So I can use PayPal to buy a hard cover book that has "potentially illegal images" but buying it in e-book format would be blocked? Potentially? That sounds like prior restraint. If a book was ruled as illegal by a court, then it might be understandable (but certainly questionable), but now PayPal gets to be judge, jury, and gatekeeper?
    What difference is this, really, from their "prior" decision? Now it only applies to graphics (and hence the "classics" are no longer in jeopardy; only modern smut authors need to worry)! But PayPal still gets to have a say in what a business owner can sell, down to individual transactions.

    And how can they tell? If I sold e-books with "potentially illegal images" I might use abbreviations in the description I use for the transaction, or some other obfuscation that PayPal could not automagically use to determine "oh -- it is that book."

    And again, if my company sold "XXX PICS" (assumed to be a book with "potentially illegal images") how would they know it was the e-book version or the "real" book being sold? Does this keep me from including an e-book version with the sale of every hardcover version?

    I hope people don't count this as a victory, and keep the pressure on.

     

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      nasch (profile), Mar 15th, 2012 @ 7:56am

      Re: Is this really any different?

      Agreed, this is an improvement, but why is PayPal still censoring books? Why don't they release a statement that says they're not in the publishing business, and will comply with any court orders and otherwise stay out of the way and process payments? I guess they're just afraid they, as a third party to the transaction, could be held liable if something is found to be illegal. I can't say it's impossible, unfortunately.

       

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    Anonymous Coward, Mar 15th, 2012 @ 6:49am

    PayPal is not a government institution, it is a private business. This is not a glorious victory for free speech against the horrible evils of censorship. It's a decision made by a private business. They could have just as easily stayed the course and it still would have nothing to do with free speech or censorship because it's not a government institution.

     

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      Stig Rudeholm (profile), Mar 15th, 2012 @ 6:56am

      Re:

      It doesn't matter that they are not a government institution. If not an absolute monopoly, PayPal is still a de facto monopoly in the business they're in. So I agree that it is a question of censorship.

       

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      The Groove Tiger (profile), Mar 15th, 2012 @ 5:54pm

      Re:

      "PayPal is not a government institution, it is a private business."

      So are banks, and still they don't get a free pass to do anything they want, like witholding your funds because you used them to do something they don't approve like buying Speedos.

       

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    Josef Anvil (profile), Mar 15th, 2012 @ 7:03am

    Ummmm but.. but.. but..

    But.. the interwebs community affecting policy was only a one time freak accident.

     

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    Chris-Mouse (profile), Mar 15th, 2012 @ 7:57am

    I'm not sure Paypal did anything wrong.

    Morality had nothing at all to do with the decision to block the hardcore porn books. Money had a lot to do with it.

    When someone disputes a charge on their credit card, the credit card companies generally reverse the charge, and absorb the loss as a business expense. For whatever reason, this type of porn has a much higher percentage of such disputed charges than other books, or pretty much anything else. To compensate for the extra losses, the credit card companies have to charge a higher transaction fee for that category of merchandise. Paypal set up their merchant accounts with the credit card companies with the intent of selling general merchandise, which has a much lower chargeback rate, but then got into the porn business by providing services for these publishers. Now, should the credit card companies be forced to absorb higher losses simply because Paypal is lumping all transactions under the same 'general merchandise' category? The credit card companies chose instead to tell Paypal that the transaction fees on all transactions were going to go up to reflect that higher rate of losses.
    This left Paypal with a couple of possible solutions. They could refuse to do business with companies generating the higher fees, they could increase all transaction fees to cover the extra expense, or they could completely rework their system to charge different transaction rates to different merchants, like the credit card companies do.
    Paypal chose option A. It was the cheapest, and quickest solution to their problem. Option B would annoy most of Paypal's customers, while benefiting only a small minority of those customers. Option C would involve a lot of time and expense on Paypal's part, without giving them any real benefit in return.

    Did Paypal make the best possible decision? Probably not, at least, not long term. Did they do anything wrong? I would have to say no. While it may have given the appearance of morality based censorship, the reality is that the decision was one of refusing to deal with a class of customer that was causing more problems than they were worth.
    Is there a way to avoid problems like this in the future? Sure, create enough online payment options that competition will make it much harder for credit card companies or online payment processors to wipe out businesses by refusing to deal with them. Unfortunately, I don't see that happening any time soon.

     

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      Yael K. Miller, Mar 15th, 2012 @ 9:35am

      Re: I'm not sure Paypal did anything wrong.

      So is Paypal now setting up a separate category for these transactions to reflect the higher transaction fee?

       

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      Anonymous Coward, Mar 15th, 2012 @ 10:50am

      Re: I'm not sure Paypal did anything wrong.

      "Is there a way to avoid problems like this in the future? Sure, create enough online payment options that competition will make it much harder for credit card companies or online payment processors to wipe out businesses by refusing to deal with them. Unfortunately, I don't see that happening any time soon."

      There are actually a fair number of similar online payment processors and many of them have arisen because of US Government putting pressure on the major US Credit Card Providers to block Gambling Transactions (coded 7995).

      What is not widely known is that PayPal's initial success (In just eight months time, between January and August 2000, PayPal surged from 12,000 accounts to 2.7 million.) was a direct result of them providing Merchant accounts to the on-line Gambling Industry.

      In 2002, after eBay bought PayPal, they shut down all the Gambling Merchants, which gave rise to other 'eWallet' processors such as Neteller, Moneybookers and many more that have come and gone in the last 10 years.

      The main reason that PayPal is so big, is because it's so big i.e. consumers can only use those processors that the merchant offers; Merchants don't want the overhead of having more processing channels than necessary, so they will choose the 'eWallet' that most consumers use or are familiar with.

      The wider issue is that this is 'back door' censorship whereby the government puts pressure on/colludes with a small number of influential players, in this case Banks, to get private companies to restrict citizens, when it is unlikely that they can pass legislation to achieve the same.

       

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        TtfnJohn (profile), Mar 15th, 2012 @ 12:09pm

        Re: Re: I'm not sure Paypal did anything wrong.

        Keep in mind that in the early days of the GWB administration they went on a campaign to attempt to shut down the porn industry which led to PayPal and some credit card companies to refuse to process transactions that might potentially involve some of the things contained in Miller. One of the sites I dealt with at the time, renderotica.com, got hit by that. This is an art site, poser and related 3D art, no real human beings but it was caught none the less.

        The point being that, whether you like the art on renderotica or not it got caught in a wide net cast by the Bush administration and then by the payment processors they were putting pressure on.

        Personally I don't care where censorship comes from it bothers me and it's almost always used for a political agenda rather than a business one.

         

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      BentFranklin (profile), Mar 17th, 2012 @ 4:09pm

      Re: I'm not sure Paypal did anything wrong.

      When someone disputes a charge on their credit card, the credit card companies generally reverse the charge, and absorb the loss as a business expense.

      I'm pretty sure credit card companies, and certainly Paypal, do not absorb the charge back themselves. They take it back from the vendor. That's a good thing, because otherwise a single consumer would have very little leverage with the vendor. The higher transaction fees do not cover charge backs, they cover the increased level of customer service.

       

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    jsf (profile), Mar 15th, 2012 @ 8:55am

    So basically PayPal lied when they said it was the credit card companies that set this requirement.

     

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    Yael K. Miller, Mar 15th, 2012 @ 9:29am

    I'm confused. I thought Paypal was leaning on Smashwords because Paypal was getting leaned on by credit card companies.

    So Paypal wasn't getting leaning on? Or did Paypal work out a deal with credit card companies? Or now to buy erotica there won't be an option to use a credit card and you can only buy if you have a Paypal account?

     

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    Anonymous Coward, Mar 15th, 2012 @ 10:03am

    I still don't understand why Paypal, a middlemen payment processor has to censor *at all* - even if it's child porn or whatever. Why is it their job to do this? This could have grave consequences as the idea spills into other industries.

     

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      LazyDave, Mar 15th, 2012 @ 4:45pm

      Re:

      I still don't understand why Paypal, a middlemen payment processor has to censor *at all* - even if it's child porn or whatever. Why is it their job to do this? This could have grave consequences as the idea spills into other industries.

      Indeed it could have consequences, especially unintended ones. If anything, PayPal ought to have honestly explained what caused them to "censor" certain things using their platform, although they eventually did on their blog. But I wonder where the credit card thingie came from as numerous others say is supposedly the reason behind this, as PayPal hasn't mentioned anything like that in even their blog.

      Like ANY private entity, person or corporation, PayPal does have the so-called right, privilege, etc. to censor how THEIR stuff will be used unless, say, a specific law addresses how that's specifically handled. I emphasis ANY in caps because, believe it or not, we also have that same so-called right, privilege, etc. to censor anyone who uses OUR stuff as well.

      I acknowledge that people will believe whatever they want, such as that any amount of censoring (even if done for arguably reasonable reasons) is still censoring. What I just can't accept or agree with is PayPal supposedly flexing their muscles to dictate one's choices when they can't stop you from doing that elsewhere, not unless someone can MATERIALLY show PayPal or whoever is indeed doing that when using, say, another payment provider's stuff. Something like that.

      In any case, PayPal did the right thing being more flexible this time. It's (again) arguably a win-win solution for everyone directly concerned, and I guess it's fine that many people objected to this to at least point out why a blanket solution isn't always a good one.

       

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    Anonymous Coward, Mar 15th, 2012 @ 12:41pm

    That's 3 wins for the internet!

     

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    Anonymous Coward, Mar 15th, 2012 @ 1:38pm

    This entire discussion is depressing, because even those who claim to oppose censorship are using phrases like "authors can appeal the decision to remove their works" as if that was a good thing (instead of opposing anyone other than the author having any say in a decision to 'remove' their works), and "legal books." As opposed to WHAT? ILLEGAL books?? Such a concept is disgusting, and saying "legal books" implies the opposite has legitimacy.

     

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    That One Guy (profile), Mar 16th, 2012 @ 1:32am

    The funniest part?

    If paypal holds to their word, and actually assesses each ebook individually, they will now have to pay people to read/review erotica.

     

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    bridgir, May 8th, 2012 @ 6:01am

    paypal

    The type of porn now protected is unconscionable. The government has laws against child porn of any kind but now anyone with a credit card and a calculator to figure out what year to put in to seem 18 can buy these books. Even amazon is selling this trash. And you don't have to be looking for trash to come across it. I was looking for a book called little brother and found that along with several fictional books about incest. I then went online to figure out how to complain to amazon about not having filters so unsuspecting buyers don't come across this garbage and found this site instead. I don't believe paypal did anything wrong. Protecting the free speech of garbage denigrates the purpose of the free speech ammendment.

     

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      nasch (profile), May 8th, 2012 @ 8:04am

      Re: paypal

      Protecting the free speech of garbage denigrates the purpose of the free speech ammendment.

      That's the tricky thing about free speech. It doesn't just protect speech that you like.

       

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