PayPal’s stock value has plummeted after the financial services company introduced a new “woke” policy to fine users $2,500 for spreading “misinformation.”
On Sunday, it was reported that PayPal changed the language of the restricted activity section on its AUP to include a clause threatening to impose a $2,500 penalty “debited directly from your PayPal account” for an expanded list of prohibited activities.
On Monday, the company’s stock price fell more than 6% as the intense backlash appeared to spook investors.
The dump caused PayPal to lose over $6 billion in market capitalization.
Shares closed at $84.52 on Monday, marking a 6.3% decline from $90.18 on Friday.
In comparison, the Dow Jones Industrial Average fell 0.3% and the technology-heavy Nasdaq fell 1% as of market close.
The policy changes include a ban on “the sending, posting, or publication of any messages, content, or materials” that “promote misinformation,” “hate,” or anything else the company deemed “unfit for publication.”
While the prior policy already forbade “hate,” “intolerance,” and discrimination, the new one would have explicitly applied to specific “protected groups” and “individuals or groups based on protected characteristics.”
Identities under this umbrella included a race, religion, gender or gender identity, and sexual orientation.
As many critics pointed out on social media, the new rule would allow PayPal to take $2,500 from the account of a user if they “misgendered” someone on Twitter.
Following a severe widespread backlash to the “woke” move, PayPal quickly withdrew the policy and scrubbed it from their website.
However, the policy can still be viewed on internet archives.
You are independently responsible for complying with all applicable laws in all of your actions related to your use of PayPal’s services, regardless of the purpose of the use. In addition, you must adhere to the terms of this Acceptable Use Policy. Violation of this Acceptable Use Policy constitutes a violation of the PayPal User Agreement and may subject you to damages, including liquidated damages of $2,500.00 U.S. dollars per violation, which may be debited directly from your PayPal account(s) as outlined in the User Agreement (see “Restricted Activities and Holds” section of the PayPal User Agreement).
The prohibited behaviors included any activities that:
involve the sending, posting, or publication of any messages, content, or materials that, in PayPal’s sole discretion, (a) are harmful, obscene, harassing, or objectionable, (b) depict or appear to depict nudity, sexual or other intimate activities, (c) depict or promote illegal drug use, (d) depict or promote violence, criminal activity, cruelty, or self-harm (e) depict, promote, or incite hatred or discrimination of protected groups or of individuals or groups based on protected characteristics (e.g. race, religion, gender or gender identity, sexual orientation, etc.) (f) present a risk to user safety or wellbeing, (g) are fraudulent, promote misinformation, or are unlawful, (h) infringe the privacy, intellectual property rights, or other proprietary rights of any party, or (i) are otherwise unfit for publication.
The financial giant’s decision led to widespread outcry, including from PayPal’s former president, David Marcus.
“It’s hard for me to openly criticize a company I used to love and gave so much to,” said Marcus.
“But PayPal’s new AUP goes against everything I believe in.
“A private company now gets to decide to take your money if you say something they disagree with. Insanity.”
It’s 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. A private company now gets to decide to take your money if you say something they disagree with. Insanity. https://t.co/Gzf8faChUb
— David Marcus (@davidmarcus) October 8, 2022
Tesla CEO Elon Musk, one of the original founders of PayPal, chimed in to agree.
— Elon Musk (@elonmusk) October 8, 2022
“Get your money out of paypal right now,” said David Sacks, another of the original PayPal founders.
Get your money out of paypal right now. https://t.co/uYCMMWC1lA
— David Sacks (@DavidSacks) October 8, 2022
PayPal’s policy did not last long, however.
Just a few days after the news spread on social media, and weeks before the policy was set to take effect, the company withdrew it.
PayPal claimed in a statement that the policy was announced by mistake.
“An AUP notice recently went out in error that included incorrect information,” said PayPal in a statement released over the weekend.
“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.”