PayPal Says Plan To Charge Customers $2,500 For Misinformation Was An 'Error'; Elon Musk, Former Executives Slam Company

PayPal, Inc. PYPL was forced to withdraw a proposed policy change that would have deducted $2,500 from those customers who spread misinformation.

The financial services company planned to expand its existing list of prohibited activities on Nov. 3 to include the sending, posting, or publication of any messages, content or materials that promote misinformation or present a risk to user safety or wellbeing, the Daily Wire reported, citing a company communication. The new policy also sought to prevent users from promoting hate violence, racial or other forms of intolerance that is discriminatory.

Criticism Mounts: Customers took to social media to voice opposition to the proposed policy change. David Marcus, former PayPal president, took to Twitter to slam the company.

"It is hard for me to openly criticize a company I used to love and gave so much to. But @PayPal's new AUP goes against everything I believe in," Marcus said.

"A private company gets to decide to take your money if you say something they disagree. Insanity," he added.

Another Twitter user going by the handle $andst7 quote-tweeted a news story on the new policy and said, "Worrying. That's why we need the X platform more than ever."

He was referring to a new platform Tesla, Inc. TSLA CEO Elon Musk had proposed to float if the deal to buy Twitter, Inc. TWTR doesn't materialize.

Musk chimed in with a 100 emoji, indicating his full support for the sentiment.

💯

— Elon Musk (@elonmusk) October 8, 2022

See also: How to Buy PayPal Holdings, Inc. (PYPL) Stock

Incidentally, Musk has a PayPal connection. Confinity, founded by Peter Thiel, Luke Nosek, Max Levchin and Ken Howery in 1998, developed a product called PayPal and launched it a few months before Musk floated an online banking company called X.com. The two companies merged later under the X.com name and then changed the name to PayPal, which was subsequently acquired by eBay, Inc. EBAY.

A few others Twitter users said they are canceling their PayPal accounts. Some of them also took the opportunity to promote Bitcoin BTC/USD.

PayPal is known to "censor or deplatform" organizations or individuals for their right-wing commentary, National Review said.

PayPal's U-Turn: Following the uproar, PayPal reportedly said the policy change went out in error.

"An AUP 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. Our teams are working to correct our policy pages. We're sorry for the confusion this has caused," a PayPal spokesperson reportedly told National Review.

Photo: Courtesy of newsroom.paypal-corp.com