Censorship and PayPal II

It is a capital mistake to theorize before you have all the evidence.

 — A Study in Scarlet

Having recently said that they didn’t want their service used for certain categories of erotica, PayPal have had a rethink, and posted a further, emollient blog piece to “clarify” the situation and explain how they would “implement the policy”. Or, to put it another way, they have largely backed down. This second blog piece is nearly as recondite as the first, and it takes some effort to understand what they are saying. While they initially incriminate e-books with images, they don’t permit the use of PayPal for child pornography, with or without images. At least, that’s what I think they mean.

The other classes of erotica are, as before, bestiality, incest and rape; and to repeat, they are concerned about only e-books with images, images that might be obscene under the US legal definition and “guidelines”. They don’t explain why text-only e-books are excluded, nor why printed books, whether with or without images, are also excluded.

And who is going to decide if the images are or might be obscene? Why, PayPal themselves. They’re not going to target the genres, rather they will go after individual titles. Clearly, they don’t trust their merchants, which given PayPal’s recent economy with the actualité in relation to both Visa and MasterCard, isn’t a very surprising attitude on their part. And all this surveillance despite merchants and authors saying that, apart from the front cover and perhaps a photograph of the author, these works aren’t illustrated. Is PayPal going to employ an “obscene image operative” to check? While PayPal’s operative might rely on the guidance in the US Miller test, it’s only when a product has come before a court and found to be obscene that it is obscene. A legal opinion is merely that; an opinion on what a court might decide, not a statement of fact; and lawyers are inherently cautious.

From what various commentators have posted, I understand that while they can have a vendor account with PayPal to sell their books, they aren’t instantly paid by PayPal when they sell something; rather, the money accumulates in an account, and only when a given limit is reached is the money released to them. I’d guess that this allows PayPal to lend the sums in the vendors’s accounts overnight on the market at the going rate of interest. (This is what banks do with the money in your current/checking account.) So, PayPal gains interest on the capital of others.

Could this be part of PayPal’s fear? That they could be seen to be profiting from the sale of obscene, and therefore illegal, e-books (or from the images). It doesn’t really seem like living “on the avails” or “from immoral earnings”, but then there are plenty of vexatious litigants around. Further, I imagine that Visa and MasterCard remit any monies directly, so they could argue that their involvement is as if it were a cash transaction. (And no one would try to incriminate the Federal Reserve or the Bank of England if their paper money was part of a transaction that involved illegal activity.)

And printed on paper books — “dead tree legacy articles” — why are they excluded? Is it enough to expect the US Post to intercept such articles under the Comstock laws or their modern equivalent? And what about international deliveries, whether of e-books or printed material? Repulsive régimes overseas don’t allow their citizens internet access, so why worry?

I’ve seen comments about PayPal’s Terms of Service, and how they can confiscate the monies in authors’s account, for infringements of these Terms; and I’ve seen comments comparing PayPal to the “religious right”. Not a very scientific survey, I grant you, but these random snippets give a flavour of PayPal’s corporate culture.

As I said previously, I’m still convinced that PayPal is scared of something; and that something fearsome has been brought to their attention either by outsiders, or possibly from within their own ranks. One response of the fearful is to close ranks and minds, and this does seem to have been their initial reaction. After some thought, and without wanting to appear as if they are back-tracking, they “clarify” their position — and they have certainly changed their position vis-à-vis their initial one.

Have PayPal found themselves in the position where their (moralistic) corporate culture has been sufficiently disturbed by erotica to want to censor it, even if it’s legal; where they felt that they could be implicated in the distribution of “obscene” material, and be thought to be profiting therefrom; and where they assumed that they could ignore the protests of authors and publishers?

I should take Sherlock Holmes’s advice before I theorise further; I don’t have enough facts to justify more conclusions. But, perhaps an investigative journalist would be interested; or an MBA student looking for a case study?

Edit 20 March 2012: I’ve just read this blog piece on the Independent, though it was written a week ago. It seems that PayPal’s founder, Peter Thiel, found himself in a difficult position, as a libertarian supporter of republican candidate Ron Paul, he couldn’t be seen to be approving censorship.

Censorship and PayPal

The PayPal company wrote to several small, independent publishers a few weeks ago, telling them to remove works from their catalogues that they, PayPal, considered to be unsuitable types of “erotica” (the quotes are theirs). These “erotic” publications were those dealing with rape, bestiality and incest. The publications were all works of fiction.

PayPal is a service provider, a financial middleman between credit card companies and banks and the consumer; it does not edit, print, publish or distribute these works.

Unsurprisingly, there has been a considerable backlash from the writers of these works, as well as from the publishers and readers. It’s apparent that many writers and readers are women, who, though I don’t think they’ve actually said so in as many words, clearly regard this as yet another example of paternalism.

You might not approve of the content of these works of fiction, but then you are under no obligation to purchase or read them. Just because you don’t like something is not a reason to ban or censor it. And while the activities are to a greater or lesser extent illegal, writing about them in the form of fiction is not. (Nor is writing about them factually, or for the purposes of education.) And if you think there’s something strange about women wanting to read stories about rape, well apparently some 40% of women have rape fantasies, so there is clearly a market for such fiction.

But you should be concerned about this attempt at censorship.

The PayPal company initial attempt to justify its actions by indicating that they themselves had come under pressure from their financial partners. These partners include Ebay, who own PayPal, and credit card companies.

PayPal subsequently tried to explain their actions on a blog piece, available here. Many commentators have excoriated the reasons they gave, that such fiction is illustrated (it isn’t), that it tends to the non-fiction (it doesn’t, even if stories are written in the first person); and that there were legal and risk perspectives which they didn’t elaborate on. (Don’t bother trying to leave a comment on the blog; only authorised personnel can do that.)

The credit card company Visa responded to the suggestion that they had put pressure on PayPal. They hadn’t, and said that they didn’t interfere with what their customers bought, as long as it wasn’t illegal.
So, why did PayPal attempt to censor publications, the effect being to destroy the businesses of small publishers, and limit the availability of writers’ fiction?

If you think about censorship, it’s about ideas which a powerful group finds inappropriate, ideas which may threaten the established order: it has a long history. Scientific thought has been censored (e.g. Copernicus and the heliocentric theory), political thought has been censored (e.g. Voltaire), as have works of fiction (James Joyce and many, many others). And you know what? Copernicus and Voltaire were right, and Joyce’s Ulysses is widely regarded as the 20th century novel. The lesson is this: that while you can ban or censor something, sooner or later it will emerge and be recognised. Ideas once expressed cannot be erased by fiat.

Powerful interests fear what’s written, seeing it as having the potential to disturb their empires and their carefully constructed identities.

What then is PayPal afraid of? And why did they suddenly, and with no warning, attempt this censorship? Tellingly, on the blog they refer to their “brand, regulatory and compliance risk” without indicating what regulations they might be breaking, or what they aren’t complying with. PayPal knew what their merchant publishers sold when they signed them up, didn’t they? Or if they didn’t, why not? What caused this volte-face?

It’s my feeling that PayPal fear for their corporate image and identity (their “brand”), as if the contamination of what they perceive as inappropriate “erotica” will taint them, like a toxic, miasmic contagion, for as long as they permit its purchase through their payment mechanism. (Visa do not have this problem.) Their loss of revenue from such “erotica” would be trivially small in comparison to their total turnover, an irrelevance.

Why now? Well, I’d guess that they have received a letter or letters of complaint from people or organisations who don’t like erotica and who wish its suppression. Nowadays, the public expectation is of an instant response to a complaint, even if the problem has never previously been considered. Often the initial response is one of denial; clearly PayPal couldn’t deny that its service was used to buy erotica. And they didn’t want to be seen to condone it. They could try then to extricate themselves by telling the merchants what they can’t sell, and transfer the “blame”. (And hope that it all goes away, quietly.)

The “our financial partners made us do it” argument has been exposed, at least as far as Visa is concerned, as a sham; PayPal were dissembling about this. What else, we might ask in passing, were they dissembling about? Once a few rumbles of discontent — “chatter” in PayPal’s curious terminology — surfaced, they offered up an exculpatory explanation to the public as a blog.

The blog’s inaccuracies and general wrong-headedness suggest that it was something cobbled together, in a hurry, after the event to try to justify their actions; from a company that, until then, did not have any policy about such fiction, and which has had a knee-jerk reaction to an event they had not foreseen. And this despite them saying that it has been their policy for years. By contrast, Visa had clearly thought about such issues, though perhaps not in such fine detail, and had worked out their policy, and were able to describe it in straightforward terms, without dissimulation, ambiguity or recourse to their “risks”.

I don’t think it likely that PayPal will reconsider and rescind their actions in the short term; corporate bodies don’t like admitting that they were wrong, nor do they relish the prospect of losing their amour-propre. Public relations managers use a three-stage method that they could employ here; firstly, a statement of regret; secondly, an admission of responsibility; and thirdly, an offer to repair the situation. Watch here how Bill Clinton did it. Will PayPal do this?

The website bannedwriters.com was set up as a direct result of this censorship attempt by PayPal; the backstory is detailed there. It’s well worth a visit.