PayPal retracted one of its policy updates on Monday after facing harsh criticism for threatening to fine users $2,500 for spreading false information.
PayPal's "Acceptable Use Policy"
PayPal has revised its Acceptable Use Policy, which will take effect on November 3. According to the new policy, users are not permitted to use PayPal to "send, post, or publish any messages, content, or materials" that spread false information.
According to reports, the new policy, which stated that users could be charged with a $2,500 fine for each violation, was set to go into effect on November 3.
Is PayPal Fining People for Misinformation?
The "confusion" was quickly addressed by PayPal, which insisted that the whole thing had been a mistake.
The company's spokesperson stated, “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."
The company's share value dropped as a result of what the company called an "error."
As of 1:19 p.m., shares of PayPal Holdings (PYPL -0.31%) were down 6%. To put things in context, the S&P 500 index had also fallen more than 1% yesterday afternoon before rallying.
PayPal's Former CEO Criticised the Policy
The new PayPal policy sparked outrage and criticism from a number of well-known individuals.
PayPal's former president, David Marcus, shared his thoughts regarding the new Acceptable Use Policy (AUP) on Twitter. Marcus described it as an "insanity," that forced him to come forward and criticize the company.
"PayPal's new AUP contradicts everything I stand for," he tweeted on Saturday. "A private company can now decide whether or not to take your money if you say something they disagree with," David Marcus explained.
Elon Musk, the co-founder of PayPal and CEO of Tesla Inc (TSLA.O), responded to Marcus' tweet with "Agreed."
Thousands of people searched for "delete PayPal" and "cancel PayPal" after the company announced plans to fine users over €2,500 for making false claims.
According to a new study conducted by Financial World, there was a 1,392% increase in users using the Google search engine to uninstall the application before the new regulations went into effect.
According to a Financial World spokeswoman, "PayPal has received backlash from their announcement, which was quickly retracted."
In addition, many Twitter users responded to the change by taking decisive action and canceling their PayPal accounts. They distributed screenshots of PayPal messages confirming the closure of their accounts to encourage others to do the same.