PayPal Holdings Inc. stated that it would not be fining users for spreading false information.
After drawing criticism for releasing a new user agreement outlining such a plan, PayPal Holdings Inc. stated that it has no intention of fining users for disseminating false information.
The problem gained traction over the weekend after PayPal published policy updates that forbade users from using the service for actions it defined as "the sending, posting, or publication of any messages, content, or materials" promoting false information. The new Acceptable Use Policy, which will take effect on November 3, will prevent users from doing these things. According to the update, each violation may result in a fine of $2,500.
The notice included “incorrect information," a spokesperson for PayPal said in a statement to Bloomberg News. “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy."
Shares of the company tumbled as much as 5.3% to $85.43, the biggest intraday decline since July 26. They dropped 4.7% to $85.90 at 9:48 a.m. in New York.
Former company executives were outraged by the initial notice, including David Marcus, who served as PayPal's president from 2012 to 2014. Marcus referred to the action as "insanity" on Twitter. Elon Musk, the CEO of Tesla and a co-founder of the platform, tweeted that he agreed with Marcus.
Right-wing politicians in the US have long charged that large tech companies censor conservative viewpoints, with social media behemoths like Meta Platforms Inc. and Twitter Inc. drawing the most criticism. Musk, who is offering to pay $44 billion to acquire Twitter, has declared that free speech will take precedence on the social media site after criticising its treatment of individuals like rapper Kanye West and former President Donald J. Trump.
While Republican calls for more regulation of big tech have found support among some progressives, current proposals requiring platforms to safeguard user privacy and security have largely faltered as Congress pursues other priorities.
Conservative politicians and social media personalities also seized on the PayPal controversy, urging people to delete their PayPal accounts. Prior to the company's statement, Tim Scott, a Republican senator from South Carolina, said that his office would investigate the policy's legality and take any necessary steps to put an end to such "corporate activism."
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