PayPal's $2,500 misinformation fine was no mistake

Over the weekend, PayPal published an updated acceptable use policy (AUP) prohibiting customers from using its services for activities identified by it as "sending, posting, or publication of any messages, content, or materials" promoting misinformation. The new policy said customers could have to pay damages of $2,500 for each violation, and was supposed to go into effect on Nov. 3

PayPal quickly apologized after the weekend for what it called “confusion,” claiming it was all just an error, but not before massive public backlash on Twitter.

Several high-profile individuals—including David Marcus (PayPal's own former president) and Elon Musk (one of the PayPal's founding team) —chimed in.

"A private company now gets to decide to take your money if you say something they disagree with. Insanity," Marcus tweeted.

"Agreed." Musk responded.

"Get your money out of paypal right now." said David Sacks.

Scores of Twitter users shared screenshots of their closed/deleted PayPal accounts as #BoycottPaypal trended on Twitter (as did "close PayPal account" on Google) — until PayPal reportedly stopped allowing users to close accounts by the end of Sunday.

"PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. We're sorry for the confusion this has caused," a spokesperson for the company said.

However, news leading up to this announcement seems to suggest that this latest move by PayPal was just another step in a direction they were already headed:

• Just weeks prior, PayPal attracted the ire of conservative media upon de-platforming (and eventually re-instating) the Free Speech Union.
• One month ago, they froze over $1.3M in funds for a tech startup.
• Earlier this year, three PayPal users have filed a federal racketeering lawsuit against the online payment service for seizing & freezing their funds.

In light of the above, it's hard to see the new $2,500 misinformation fine as an error — this is a direction PayPal has been taking for years, and they have grown more aggressive about it in recent months. Researcher Stefan Patatu also uncovered evidence from archive.org that the AUP was not published in error.

PayPal shares were down as much as 6% the Monday after the announcement, the stock is down over 60% on the year.

What do you think — was it an honest mistake, or a guilty retraction? Feel free to comment or vote in the poll below :)