Online payments network PayPal caved to public pressure on Monday, saying it never intended to publish new policy language in an updated user agreement that threatened to fine users $2,500 for spreading misinformation.
The notice caused a backlash over the weekend on social media and shares of the San Jose, California-based company were down almost 6 percent after the update.
PayPal apologized for the confusion and a spokesperson told Bloomberg News the update included “incorrect information … PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy.”
David Marcus, the former president of PayPal from 2012 to 2014, tweeted on Oct. 8 that such a move was “insanity.” PayPal Co-Founder and Tesla CEO Elon Musk, a free-speech advocate, agreed in a tweet. Prominent conservative voices such as actor Kevin Sorbo also criticized the plan.
Tensions are running high over misinformation claims heading into the midterm elections, which could see the Republicans take back both houses of Congress, Fortune reported.
“A private company now gets to decide to take your money if you say something they disagree with. Insanity.” Marcus said.
In the policy update, PayPal prohibited its 429 million users and merchants from expressing what the company views as misinformation. Effective Nov. 3, users can’t use PayPal for activities described as “sending, posting, or publication of any messages, content, or materials” promoting misinformation.
This would have expanded PayPal’s list of prohibited activities. PayPal said it won’t fine users $2500 who engage in “misinformation” or “hatred” against protected identities.
TechStartup published what it said is the original seven-page PDF file of the PayPal policy.
“Next time you’re clicking through one of those impossibly long and impenetrable legal disclaimers to a company’s terms of service, it may be time to have a closer look,” Christiaan Hetzner wrote for Fortune.