PayPal criticised for blocking sales of “extreme” ebooks

Nicole Kobie March 8, 2012

PayPal has once again sparked complaints after threatening to block payments – this time over sales of “extreme” erotic ebooks.

PayPal has threatened to “limit” payments to ebook publisher Smashwords if it continues selling books featuring topics such as “incest, rape and bestiality”. It has also reportedly sent similar emails to BookStrand.com and eXcessica.

“As scholars and booksellers can attest, these are themes prevalent in many forms of literature, from Grecian myths to the Bible,” said the Electronic Frontier Foundation’s activism director Rainey Reitman in a blog post, admitting the titles in question “may not appear to be in the same league”.

What right does a financial institution have to censor legal content? Authors are being caught in the middle

Smashwords founder Mark Coker told Reuters: “Electronic payments have become the oxygen of ecommerce and ebooks, so PayPal, banks and credit card companies have enormous power. What right does a financial institution have to censor legal content? Authors are being caught in the middle.”

PayPal response

PayPal said it was working on resolving the situation, but that “extreme or potentially illegal” content was banned via its terms and conditions.

“While we can’t comment on the specifics of the Smashwords account, we can confirm that we are working directly with Mr. Coker to resolve this issue,” a spokesperson told PC Pro. “Payments to the Smashwords account have not been suspended and Mr. Coker is able to use his account as normal.”

“In general, PayPal does allow our service to be used for the sale of erotic books, but we have to draw the line on certain adult content that is extreme or potentially illegal,” the PayPal spokesperson said, adding that is made clear in its acceptable use policy.

“Our decisions relating to adult content are based solely on business factors – we consider what’s standard across the industry, our agreements with the card associations and banks that enable us to provide service to our customers, and of course, the laws governing the sale of adult-oriented content,” PayPal added.

Latest controversy

It isn’t the first time PayPal has withdrawn payments. The company blocked funds to WikiLeaks, but also temporarily cut off social network Diaspora and froze donations raised by the Regretsy site.

“Unfortunately, this is not the first time we’ve seen a payment services provider interfering with access to lawful speech,” Reitman noted. “As we saw when MasterCard, Visa and PayPal created a financial blockage against the whistleblower website WikiLeaks, financial service providers are an important part of the chain of intermediaries upon which online communication depends.”

The EFF called on PayPal to stop trying to operate as “the morality police”.

“The internet has become an international public commons, like an enormous town square, where ideas can be freely aired, exchanged and criticised,” Reitman said. “That will change if private companies, which are under no legal obligation to respect free speech rights, are able to use their economic clout to dictate what people should read, write and think.”