It is encouraging that Tory MPs are taking seriously the threat to an open society posed by PayPal’s demonetisation of UsForThem, Toby Young, the Free Speech Union and the Daily Sceptic. And it is more encouraging still that they are likely to respond to the threat through legislation – possibly through an amendment to the Financial Services and Markets Bill. It is vital, however, that they get this response right, and understanding the purported legal basis for a company like PayPal excluding a user from its services is crucial in this regard.
To get some preliminary matters out of the way, it is important first to distinguish a financial services provider like PayPal from a social media outfit like Twitter or Facebook/Meta. There is a case to be made (although it is ultimately not one I would concur with) that it is legitimate for a social media operator to exclude people who express opinions deemed undesirable by its owners. I agree, for example, with the position that the Supreme Court adopted with respect to the baker in the famous ‘gay cake’ case; it is unconscionable for the law to force the owner of a private company to propagate a message that would conflict with said owner’s sincerely held beliefs. I think large social media providers are fundamentally different from the baker in that case, but I can at least understand the basis on which somebody would argue that Twitter booting, say, Andrew Tate, is essentially the same as a Christian baker refusing to bake a cake bearing a message supporting gay marriage (or, let’s say, a hypothetical Muslim printer refusing to print a satirical magazine bearing an image of the prophet). But there is no sense in which PayPal can be construed to be said to be in this position. PayPal does not serve to propagate messages of any kind; nor are its users even publicly known or identifiable for the large part; whether or not the Daily Sceptic is a customer of PayPal places no requirement on the latter to associate itself with the expression of any view whatsoever. It is a different kettle of fish.
It is also important to acknowledge that there are legitimate reasons for a business like PayPal seeking to exclude users who express certain kinds of views that might be connected with criminal offences, even indirectly. To use an obvious and extreme example, there would be nothing wrong with PayPal closing an account it discovered to be connected to an organisation dedicated to sharing positive perspectives on paedophilia; while a group of paedophiles getting together to talk about how wonderful their predilection is would not (I think) in itself constitute a criminal offence, it is easy to see why PayPal would wish to avoid coming within a barge-pole’s distance of any suggestion it was knowingly assisting such a group. However, this kind of concern clearly would not apply with respect to the FSU, UsForThem, the Daily Sceptic or Toby personally.
A company like PayPal cannot therefore fall back on these kinds of excuses in behaving as it has done. And in any case, we can all what is really going on here – it’s nothing to do with matters of conscience or a legitimate attempt to ‘de-risk’ with respect to potentially criminal behaviour. (It is notable, for example, that PayPal appears to be ‘intensely relaxed’ about the risks of being seen to be associated with precisely the kind of paedophile support group I mentioned earlier.) This is simply a case of somebody at PayPal wishing to send a statement: “We’re on the side of the good guys, and if you’re not on our side, mind your P’s and Q’s.” The fact that a very important set of elections is due to take place in the US in November undoubtedly has something to do with this.
It is therefore entirely legitimate for Parliament to legislate to prevent this kind of behaviour, and the question thus becomes: what form should such legislation take?
Looking at the underlying purported legal justification for PayPal’s conduct will give us an answer. The recent closure of the accounts of the Daily Sceptic et al seems to have been done on the basis that these respective parties have violated their respective User Agreements with PayPal. The User Agreement, it must be said, has not been particularly clearly drafted, but this much at least is clear: PayPal may close a user’s account if the user is in breach of its terms. The specific breaches themselves in this case were not, however, made particularly clear. Initially, it seemed that PayPal was accusing the Daily Sceptic et al of breaching its Acceptable Use Policy – namely item 2 (f) of that document, which prohibits the user engaging in ‘the promotion of hate, violence or other forms of intolerance’. This obviously wouldn’t stick, though, and subsequent statements by PayPal have suggested that the accounts were closed on the basis that the Daily Sceptic et al were ‘providing false, inaccurate or misleading information’, which is on the list of ‘restricted activities’ in the User Agreement proper.
The haphazard way in which PayPal appears to have conducted itself is suggestive that the decision was made to close the accounts first, with the justification being worked out afterwards. But we do now know what its legal representatives would trot out as the purported contractual basis for closing the accounts in question: being in breach of the User Agreement by engaging in the restricted activity of providing false, inaccurate or misleading information.
And this in turn would allow us to identify the remedy in the creation of a relatively short Act (or amendment to the Online Safety Bill). I am not a Parliamentary drafter, but my suggestion would be something along the lines of:
A provider of financial services may not by reference to any contract term terminate or suspend the provision of services to a user on the basis of that user spreading false, inaccurate or misleading information, or similar, unless it is satisfied on the balance of probabilities that the spreading of said information would in itself constitute a criminal offence in the laws of England and Wales.
This would quite neatly prevent PayPal or any other such provider from doing this kind of thing in future, while allowing such operators to ‘de-risk’ for the legitimate reason of avoiding any connection to the commission of crime. The consequence would simply be to make a term of a contract between a financial services provider and a customer purporting to allow termination on the grounds of the spreading of false information, etc., unenforceable, and the legislation could be worded to give this immediate effect.
Dr. David McGrogan is Associate Professor of Law at Northumbria Law School.
Stop Press: Allysia Finley has written a good comment piece for the Wall St Journal about why the Supreme Court may well uphold the law in Texas prohibiting large social media companies from blocking speech based on viewpoint.
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Shut the bastards down!
Let’s go back to first principles. What is a company? A legal fiction that lends a slice of the state’s monopoly of legitimate violence to a group of individuals wishing to act collectively.
This has value in simplifying the alignment of incentives and mutualisation of risk to quickly attempt ambitious enterprises.
But is also has risks of creating tyrannical hierarchies with influence beyond their purpose. By changing company law to create ‘Corporate Social Responsibility’ governments have exacerbated this risk. If companies have to do ‘social good’ they first have to decide what is socially good. That is a job for democracy not corporate hierarchies and self serving capital.
the answer is to get companies back in their lane. I would suggest changing company law to recognise companies as legal personalities only for the specific purpose for which they were formed. This would enable, for example, tax authorities to treat their revenues as personal income. That should give boards pause for thought.
‘A legal fiction that lends a slice of the state’s monopoly of legitimate violence to a group of individuals wishing to act collectively.’
Twaddle.
A company is a shortened form of The Members in Company, the members being a group who pool their capital and put it at risk to bring goods to market to serve consumer demands, profitably.
The key word is risk to their capital.
A problem arises when companies expand and have the bulk of their shows owned en bloc by large funds whose managers have little incentive to supervise and control the hired management, because there is no risk to their money, and the managers similarly perceive no risk to their money.
But over 99% of UK companies are SMEs who are in many cases owner managed who are influenced by risk to their capital.
Most large corporations do not survive. Eventually the are displaced by the lean, mean, hungry brigade of SMEs and entrepreneurs. Just a matter of time.
Companies only thrive if they have customers. So it is our hands.
Twaddle yourself.
Most large corporations do not survive. Eventually the are displaced by the lean, mean, hungry brigade of SMEs and entrepreneurs. Just a matter of time.
What planet are you living on? Large corporation handle potentially successful competitors they can’t otherwise cope with by buying them.
A flaw in the suggested draft amendment is the clause ‘unless it (ie the provider off financial services) is satisfied. . . said information would in itself constitute a criminal offence. . .’ that leaves the issue in the opinion of the provider of financial services rather than, say, the ‘reasonable man’ test.
I am afraid I am resolutely against the use of the law for such matters. The law has much more important things to do.
The simplest of all answers is to boycott paypal, which I have been for a number of years, for other reasons.
I tend to favour minimal state interference but leaving it to the public to boycott means you’re allowing the public to acquiesce in the oppression of a minority (lockdown sceptics) by communications platforms and financial services companies. Communications and financial services are essential utilities and it’s simply impossible to function effectively at an individual or organisation level without them. Neither can freedom of speech exist in such circumstances. I’m afraid making them behave as a public utility by force of law is the only way. It’s simply not realistic to think that alternatives will spring up and flourish as the barriers to entry are so high and global corporations dominate those markets and are captured by globalist “progressives”.
PayPal isn’t the only gal in town, nor is the twit-creature or the book of fæces, so you can only be oppressed by these clowns if you allow yourself to be.
When I was growing up, the general rule was once you found out who the bullies were, you stayed away from them – if you didn’t you got what you deserved. But that was in the day we were expected to learn to look after ourselves not rely on the State to wipe our noses and backsides.
I am weary of listening to people whinge and whine about Big Tech companies, but keep going back for more.
Agree insofar as knee jerk legislation usually makes things worse. But ‘Use of law’ could and should include removing bad law.
It can be tricky to avoid it’s use altogether, unless you end up boycotting a third party. E.g. I sometimes buy products from a local brewery that uses PayPal, and when ordering online, it (PayPal) encourages one to open an account, but when paying by other means, either a debit or credit card (which I do), I’m not sure whether that means that PP process the transactions or not. I would not want to shut off the firm altogether.
I know of no enterprise that can only be paid via PayPal. It plugged a gap in the market where money exchanges between private individuals or with small businesses were uneconomical or not possible using credit cards.
Now with on-line banking, virtual banks like Starling Bank, easy, free bank transfers, there is nothing unique to PayPal and an Internet search offers over a dozen alternatives to it.
Quite. Because ‘law’ breeds lawyers. And any company can find a way round ‘laws’ which are difficult to draft to accommodate current and future circumstances.
And regulation adds to a company’s cost and that cost ends up with the consumer.
Best plan, as you say, is stop using them. If enough do, then either they will get the message and reform, or it provides an opportunity for new market entrants to serve the disenchanted consumers.
Boycott PayPal. Simple, effective solution, by the people. No lawyers need apply.
The challenge, as ever, is to win hearts and minds to change convention.
Not at all simple nor effective as we are such a small minority. Sites like DS and organisations like FSU are part of the battle to win hearts and minds – if we cannot get our message across, we cannot win that battle.
Agree. In an ideal world it would be simply a battle for hearts and minds.
In the real world, however, the game is completely rigged. They have all the cards and all the aces. They have the finance, they control the media, they control the politicians, even though we like to think they don’t.
It’s a rout even before we start.
Using PayPal need not be part of the solution. And they clearly don’t want to be, so f*** ’em.
There are over a dozen alternatives.
I find it interesting that Nationwide have, in the last few days, sent a relative of mine details of changes to their T&Cs to take effect on 16th Jan 2023. A couple are of particular interest, under “Helping you stay safe” (how kind of them!)
1) We’re adding into the Terms the ability for us to refuse to make a payment if we think it’s a scam or it’s to a recipient that may be acting unlawfully.
2) We’re adding in new provisions to allow us to stop payments in and out of your account, or block access, for safety reasons.
Interesting eh? Must be in line with the online harms bill but it chimes rather too closely with the PayPal incident. Something for greater minds than mine to ponder.
My italics, btw.
The business of with whom I spend my money has sod all to do with banks.
I agree with you completely. It is why I have closed my PayPal account. I just wonder if these changes by NWide are determined by the Online Harms bill and is this just one step closer to Social Credits?
In theory, that’s correct. But this assumes that it’s actually you spending the money. Something which happened to me in the past was that I got a call from NatWest that someone was trying to withdraw a large sum from my bank account via a cash machine in Thailand. I have absolutely no idea how these someones got access to my bank account but I’m grateful to NatWest for noticing something odd was going on and talking to me about it before the payment was made.
Unlawfully = a criminal act is not the same as arbitrary rules about approved social behaviour as determined from time to time.
I think that’s motivated by something more mundane, namely, stop fraudulent payments, eg, to online scammers.
My choice would be to let PayPal do whatever they want in exchange for an ironclad guarantee from the state that cash will continue to be an accepted form of payment without limitation or restriction.
Isn’t the best way for people to stop using these shysters and for other enterprising people to start a business to serve this new cohort of consumers?
But ‘cash’ transactions can never be stopped. What is ‘cash’? It is a token – that has no intrinsic value – which another will accept in exchange for goods/service they supply because they know they can exchange it for goods and services from others.
‘Cash’ can be anything… shirt buttons if you like. Currently Government have a monopoly on money, which earns them sovereignty, an income they won’t want to give up.
In Africa in the absence of banking, non-local transaction were made using mobile phone credits. A buyer would buy call credits for the seller’s phone in exchange for goods.
It is why Governments are doing their best either to stifle or control crypto currency because it is in competition with their fiat money.
But even if Government were to withdraw all its cash from circulation, there is nothing to stop people accepting other tokens of exchange. It is after all how money started in the first place as a replacement for barter.
It depends what is meant by “intrinsic value”. If you’ve got a pot of cash, you’ll soon notice how it’s value goes down under rapid inflation. No doubt tokens are subject to inflation or vice versa as well. What they don’t like are transactions done with cash only, no receipt, no paperwork – i.e. VAT free etc. One of the well known reasons why they discourage cash.
One can conjecture that this term was inserted into the Paypal policy to enable punishing people for publically disagreeing with the global Corona orthodoxy. It’s a completely empty soap bubble which has absolutely no place there. Eg, all opposing parties in a democracy routinely accuse their opponents of providing false, inaccurate or misleading information
and it’s certainly not the business to a fincancial service company to settle political disputes in a democratic society by executive fiat. That’s an outrageous idea.
Maybe people at Paypal believe that the company is the secret world government of the new normal or something like this, but this is certainly not the case. Someone is seriously overstepping his mark here.
So many institutions have been taken over.
So called liberals are really socialists who want is to live in the dull tyranny of conformity.
Everything in life that is good is being killed.
A flushing toilet – the perfect logo for Oxford University Press
https://www.conservativewoman.co.uk/a-flushing-toilet-the-perfect-logo-for-oxford-university-press/
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If the world hates you, remember that it’s nothing personal.
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A provider of financial services may not by reference to any contract term terminate or suspend the provision of services to a user on the basis of that user spreading false, inaccurate or misleading information, or similar, unless it is satisfied on the balance of probabilities that the spreading of said information would in itself constitute a criminal offence in the laws of England and Wales.
Thing is, they could still refuse to deal with you, including closing your account, simply because they don’t like you or your views, and drawing on any number of concocted pretexts to justify their doing so.
Perhaps worse, many commentators BTL on here – including yours truly – back in those heady days of 2020-1 were very vocal in calling for people to refuse to wear masks, ignore the terms of the lockdown, get on the streets on demonstrations in flagrant breach of gathering numbers, and so on. Those posts could be viewed as promoting criminal activity – which under the terms of the vile laws of the time they indeed were – and thus justify the closing of the site, or at the very least the BTL comments on the site (which are and have been much of the life blood of the site).
Disappointing to read “…a hypothetical Muslim printer refusing to print a satirical magazine bearing an image of the prophet.” He may be Dr. McGrogan’s prophet but he’s not mine. Describing Mohammed simply as “the prophet” implicitly confers a status which is unwarranted, and encourages a mindset open to acceptance of blasphemy laws.