Tuesday Talk*: Pay To Play

Online payment processors like Paypal are private companies and thus have the choice to do business with whomever they choose, provided it doesn’t discriminate against a protected class. But what happens when the choice is exercised in a way to disfavor unpopular political views or enterprises that do icky things?

In the past, it might never have occurred to a company to wield its business availability in such a way, but given the concerns about political correctness, does allowing a company engaged in evil enterprise not make the payment processor complicit? Sure, companies want to make money, but they’re similarly afraid of being blown up as a pariah for allowing their services to be used by the enemy of shriekers. This is particularly true for digital business, which relies to some extent on being cool enough to be acceptable to digital natives.

FIRE, now the Foundation for Individual Rights and Expression, has something to say about this.

    • The issue: Online payment processors like Venmo and PayPal often deny Americans access to these vital services based on their speech or viewpoints. 
    • The concern: When these companies appoint themselves the arbiters of what speech and views are acceptable, shutting people and organizations out of the online financial ecosystem for wrongthink, they seriously undermine our culture of free expression.

Imagine you could no longer use PayPal, Venmo, or another online payment processor because you run an organization that defends free speech for controversial speakers, operate an independent media outlet that challenges mainstream narratives, sell erotic fiction or “occult” materials, or . . . tried to submit an article about Syrian refugees into a newspaper awards competition.

These are not hypotheticals. They’re real, and they illustrate why online payment service providers should stay out of the business of policing their users’ speech and views.

The concern is obvious. By denying disfavored individuals and businesses access to significant digital financial mechanisms, you’ve cut off their funding and assured their financial failure. Granted, people can still send checks, if they know what checks are or have ever used a stamp. But I digest.

Access to online payment systems is crucial for the innumerable individuals and organizations that rely on financial support for their expressive activity. It’s essential to content creators’ ability to earn a living, to websites’ and other businesses’ ability to raise revenue, to fundraising by political candidates and nonprofit organizations, and to everyday Americans’ ability to consume content and support causes they believe in. When payment processing services act as political hall monitors or moral arbiters deciding what speech and viewpoints are out of bounds, they present a grave threat to free expression.

But what of the company’s right to free expression?** What of the others, who hate the disfavored companies, right to free expression? What of their right to try to coerce companies to shut their doors to businesses that are hated for their ideological heresy?

  • PayPal’s acceptable use policy (and that of Venmo) states users may not use PayPal for transactions involving:
    • “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime”
    • “items that are considered obscene” “certain sexually oriented materials or services.”

On the one hand, they lack the means to distinguish between real and imaginary violations of these policies, as reflected in some of FIRE’s anecdotes. On the other hand, they lack any due process to challenge their decision to shut off the spigot.

Unlike, say, certain legislators who believe that enacting poorly written, flagrantly unconstitutional laws is the solution to improper social pressure, FIRE argues that payment processors making ideological choices are undermining our “culture” of free speech. Not the First Amendment. Not a statute. Our culture, that the embodiment of free speech in the First Amendment doesn’t dictate support for it, but is a reflection of our principles favoring free speech.

Is FIRE right? Is there anything wrong with companies exercising their right not to do business with anyone they please? There are obvious conflicts of free expression all over the place here. Whose rights prevails? Or is it a matter of whoever presents the greatest threat to business wins the day, as in might makes right?

Should a law be passed requiring online payment processors to take all comers, like a public accommodation can’t discriminate on the basis of race? Will they then be forced to process payments to terrorists so they can blow things up and kill people? Where is the line?

*Tuesday Talk rules apply.

**Why, one might wonder, would a company like paypal even consider where money was going. After all, it’s just a money processor, not a church. FIRE explains:

PayPal’s CEO Dan Schulman defended the company’s policy against hate speech. “Probably the most important value to us is diversity and inclusion,” Schulman said.

You might think the most important value was to earn a profit. Apparently not.

19 thoughts on “Tuesday Talk*: Pay To Play

  1. Paleo

    What happens when we get to a point where people with disfavored views are completely shut out from everything? Just let those bastards and their families starve to death in the cold dark?

    Schulman appears to be one of the many progressives who believe the way to advance the policies of diversity and inclusion is not to actually practice them personally.

  2. Guitardave

    So when it comes to “blowing things up and killing people”, will they decline the transaction when I use pay-pal to settle my IRS bill?

  3. Leonard James Akaar

    There seems to be some huge barriers to entry into the payment processor market. Tear those down, maybe I don’t care who Paypal kicks off or why.

    I can understand the free association rights of a small printing business kicking out a customer who just spouts racist crap all across town because out of their 100 customers, everyone in town knows that guy is a jackass and no one wants his taint to rub off on them.

    But when it’s Paypal claiming that the tens of thousands (1e4) of dollars annually that some activist group transacts across paypal taints them when compared to the $1.2 trillion (1.2e12) processed annually by paypal (*), then we’re talking e4/e12 * 100% or e-6% or 1 one millionth percent of paypal’s transactions, then I fail to see that paypal servicing them has any of their taint rubbed off on paypal, esp not when you consider the number of corrupt legislators, cpas, felons, racists, father stabbers and litterers that paypal is still processing payments for,

    > PayPal’s CEO Dan Schulman defended the company’s policy against hate speech. “Probably the most important value to us is diversity and inclusion,” Schulman said.

    1 one millionth percent. Schulman is talking homeopathy here.

    I think this is an Internet Century and we have to acknowledge that to be a full citizen, one must be able to put up a website, protect it from massive attacks, and conduct commerce across it. And those abilities should only be removed through due process.

    I would regulate dns providers, ddos protection, and some level of payment processor (depending on where the barrier to payment processors is) similar to common carrier so that they have viewpoint neutral policies that can be removed through a viewpoint neutral TOS violation or via court order.

    (*) a google search for how much money does paypal process annually

    1. Elpey P.

      Sure, let’s give more policing powers to the same institutional forces that in the past championed all sorts of injustices and atrocities. Even a blind squirrel finds a nut once in a while, so you can point to some Truly Bad Targets, but most of this rhetoric and action has as much integrity as picking targets at random out of the phone book. The people cheering it on can’t fathom being treated as the bad guys. Even when they are.

      If they had good judgement the “progressives” would wonder why they want to give this power to their historical enemies. Unless…they aren’t actually historical enemies, and in a different context they would have been in cahoots. But I divest.

      1. Elpey P.

        My oddly backwards misuse of the reply button was either a phone usability issue or a metaphor for targeting narratives. Accept the mystery.

  4. Pedantic Grammar Police

    “Should” is irrelevant. They are private companies and they will do what they will do. Attempts to legislate “good” behavior will, as always, fail and/or backfire. The obvious solution is to accept payment via crypto.

    The crypto community is very grateful to the online payment processors for their generous sacrifice, and I heartily encourage them to continue down this road.

  5. Jake

    Hmm, forcing businesses to transact with people they don’t want to at the tip of a spear. What could possibly go…You know what? Nevermind. I liked this idea when the cause du jour was compelling bigots to make a cake.

    1. L Phillips

      I’m in Jake’s camp on this one. Let PayPal eject or threaten anyone they like. Money, like water in the stream, just goes around the big rocks. Fortunately there are many legal if occasionally cumbersome ways for it to do so. And they don’t involve crypto.

  6. SamS

    Your first sentence says it all. If FIRE ‘s theory is accepted the protected class will be all consumers.

    1. Rengit

      I don’t think this is right, the protected class would not be “all consumers”, the protected class would be “political speech/affiliation”. All of the current protected classes apply to everyone: race, sex, sexual orientation, disability status, etc. A protected class is a grounds on which you can’t discriminate, not an exclusive membership club that only some people are a part of. Furthermore, Romer v. Evans suggested that there are extremely few limitations on what can and can’t qualify as a protected class, it’s not only for obviously immutable traits like the color of your skin.

      1. Elpey P.

        “All of the current protected classes apply to everyone”

        Run that up the flagpole on twitter and see how quickly you get dogpiled by blue checkmarks.

  7. phv3773

    It’s not always possible to live up to one’s brash talk, and I think it wouldn’t be possible here. With a gazillion customers, it would be difficult to isolate the unwelcome if they showed up under a familiar name, but they often won’t. Companies have subsidiaries and outsource lots of stuff.

    PayPal cleansing their client base would be like Facebook moderating posts: mostly unsuccessful.

    1. Leonard James Akaar

      Isn’t that the issue though? PayPal will still be transacting with all sorts of evil-doers and yet making digital outcasts of people and groups on the basis of ideas that Paypal dislikes.

      So efforts will be mostly unsuccessful and yet have oversized, life threatening impacts on those they do target.

  8. James

    Per reporting by Matt Taibbi, PayPal has announced “it would be cooperating with authorities in a content moderation campaign.” Note, cooperation includes blocking several independent media sites from using the service. This appears to be done without any rulings from the court. Perhaps the right to free expression is the wrong legal principle to apply to these PayPal decisions.

  9. Will J. Richardson

    Once you grant the governments authority to police the behavior of private persons and enterprises under the rubric of “positive” Civil Rights, that government power can be used to compel obedience consistent with both “progressive” and “conservative” agendas. This is explained well in Christopher Caldwell’s book The Age of Entitlement.

  10. Solon

    If the best response to speech you don’t like (and PayPal’s restriction of speech it doesn’t like using its platform is a sort of speech itself) is to counter it with more speech, it looks like FIRE is making the best response. By focusing on free speech as an American value, rather than a 1st Amendment Right (which, I feel obliged to acknowledge, is not applicable in this case, PayPal being a private entity), FIRE is able to underscore not why the government should act (none of its recommendations appeal to that mechanism), but why the service providers should change their behavior. I am probably not a skeptical as others as to the efficacy of this approach, since the service providers are clearly reacting to what they believe to be popular opinion; if popular opinion evinces the value of free speech, then the service providers will probably act accordingly.
    Preach it, FIRE!

  11. Curtis

    Assume I am author who is unpopular and cannot Tweet, use Facebook, sell books on Amazon, create an Android or iPhone app, have a website on Amazon or other web providers, sell using PayPal or Venmo, hold a non-violent public meeting, live somewhere without be doxed, etc.

    You can pretend I have “Freedom of Speech” but autocrats only dream of having the same censorious powers that the woke have.

  12. Yassine Meskhout

    I largely agree with FIRE’s concerns and remedies. At the same time, I think a significant amount of this issue is entirely self-inflicted. I’ve had my own issues with Paypal suspending my account for what I strongly suspect was political reasons. As the legal nerd that I am, I read their terms & conditions and followed their process to a tee. I documented some of this in a twitter thread recently: https://twitter.com/ymeskhout/status/1575525653255901185

    Reading terms & conditions *sounds* too intimidating to contemplate for most people, and that only serves to reinforce this aura of helplessness when dealing with big corporations. I want to see more efforts to use the tools already currently available. Terms & conditions were successfully deployed against Amazon last year, when lawyers (following Amazon’s own rules) flooded them with 75,000 arbitration demands, resulting in tens of millions of filing fees for Amazon.
    https://www.wsj.com/articles/amazon-faced-75-000-arbitration-demands-now-it-says-fine-sue-us-11622547000

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