Posts Tagged ‘paypal’

Once more on PayPal, etc.

So the debate still rages — as well it should — on PayPal and its efforts to get Smashwords (and other vendors) to delete certain titles from their stock. The titles in question are, at the moment, erotica books that are about rape, bestiality, incest and pseudo-incest. There is a petition available (probably more than one), and many authors have protested, including Remittance Girl, Selena Kitt, Heather Killough-Walden, and others.

In my previous post I said, and I still believe, that what PayPal is doing is within their rights. The word “censorship” has been one to handle carefully. So I guess I should clarify here that I do not think PayPal is violating the First Amendment. The First Amendment says that Congress shall make no law abridging the freedom of speech or expression. So what PayPal does is, well, what PayPal does. For more about censorship and obscenity definitions and some legal stuff, please check Stephanie Draven’s blog.

A few sources, including Smashwords’ press releases, state that “PayPal began aggressively enforcing a prohibition against online retailers selling certain types of “obscene” content” (from Smashwords’ 2/24/12 release). This made me curious, and I searched for PayPal’s terms of service. I found them, including the Acceptable Uses portion, which applies to all users.

It states that:

You may not use the PayPal service for activities that:

  1. violate any law, statute, ordinance or regulation.
  2. relate to transactions involving (a) narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety, (b) drug paraphernalia, (c) items that encourage, promote, facilitate or instruct others to engage in illegal activity, (d) stolen goods including digital and virtual goods (e) items that promote hate, violence, racial intolerance, or the financial exploitation of a crime, (f) items that are considered obscene, (g) items that infringe or violate any copyright, trademark, right of publicity or privacy or any other proprietary right under the laws of any jurisdiction, (h) certain sexually oriented materials or services, (i) ammunition, firearms, or certain firearm parts or accessories, or (j) ,certain weapons or knives regulated under applicable law. (bold emphasis mine)

So who decides what’s obscene, or what the certain sexually oriented materials are? After all, one person’s trash is another’s treasure, right? In this instance, PayPal gets to determine this, because this isn’t about what you can or can’t read, it’s about how you can obtain it, and PayPal does not want their service used to acquire the items and services listed above.

Many people have said, PayPal can’t tell me how to spend my money. This is true. If you have money in a PayPal account, you are can withdraw it or move it into another account, and do with it as you please. However, if you are going to use PayPal’s service to spend your money, you will have to abide by their rules.

I realize this sucks for a lot of independent authors out there, and small publishers and other retailers. It will cut into sales, at least in terms of delaying them, and probably cause other headaches. Is PayPal censoring what Smashwords can carry? Well, yes, it is. However, Smashwords knew the terms when they signed on, and had some luck because PayPal did not enforce the terms. They were really lucky, because from what I’ve seen, PayPal is SW’s only payment processor. It is unfortunate that PayPal did not consistently enforce their prohibitions from the beginning.

Is PayPal a monopoly in the micro-charging world? Many have said it is a virtual monopoly or a de facto monopoly. If that’s so, then presumably it is because so many people were pleased with the way PayPal worked that they went to it. It’s kind of a sad paradox that probably the very people who made PayPal what it is are protesting this new policy enforcement.

Which, by the way, I’m all for them protesting. You have freedom of speech and expression, and you should definitely use it to make your feelings about PayPal known to them and to the world. According to Smashwords’ latest press release, PayPal is already backing off to some degree in how they are enforcing this. Keep tweeting and blogging and signing petitions because public response like this can have an effect on a company.

According to the SW release, PayPal has put some of the “blame” (if blame is the right word) on the credit card companies with which they have agreements. I have to say I’m a little skeptical here. I’ve looked for an “acceptable uses” section from Visa and MasterCard but haven’t found it — if someone has a link, I’d be pleased to pass it on. Generally, I can’t think the CC companies are too concerned with what you buy, so long as it’s a legal product. And, as many people have pointed out in various blogs and forums, stories about underage sex, bestiality, etc., are indeed legal. Icky to a lot of people, but legal.

As Remittance Girls says in this blog entry, “I don’t believe for a moment that the ‘charge-back’ rates are higher on ‘taboo’ erotica than it is on any other genre of books. In fact, because they are so well labelled and readers are so informed of the transgressive nature of what they are purchasing, I’d hazard a guess that the charge-back rates are minimal.” I agree. I don’t agree with the entire post, but I do on that point.

I want to restate a few things I’ve said already. You have a right to freedom of speech and expression and I think that is one of the best things about the U.S. However, you don’t have a right to get paid for it. If you can, terrific. Publishers and retailers are also not obligated to carry your works; they can refuse for whatever reason (if I’m wrong, someone out there please let me know). Borders surely didn’t carry every title available. You can put your files out there for free, or you can accept checks and money orders and send the files or books to the purchasers when they clear. This is very clunky, compared to what we are used to (which hasn’t even been around all that long), but it worked for years and years.

Until a new payment processor arises that doesn’t have PayPal’s restrictions, that might be the best route.

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Let’s talk censorship

As many of you out there in the cyberworld know, there’s quite a controversy going on involving PayPal. It’s not necessarily new, but the gist of it is that book vendors such as Smashwords, AllRomanceEbooks and Bookstrand must, according to PayPal, remove titles involving bestiality, rape and incest or PayPal will shut down those vendors’ accounts.

I feel I should make some disclosures: 1. I write romantic books with sex scenes that are available on some of these sites, like Smashwords, so I have an interest in what’s going on here. 2. I do not have a PayPal account; my husband does, but I do not have a personal account. 3. I dislike censorship as much as the next person. 4. I disagree with what PayPal is doing. 5. What PayPal is doing is not censorship.

That last one is probably going to put me on the wrong side of this for a lot of people, but it’s true.

Here are some things to check out:

I’m sure you’ll also easily find other threads, forums, etc., that talk about this.

One problem in this debate is the word “censorship.” Is what PayPal is doing censorship? Some will say no, some will say yes, and the answer, as Ben Kenobi might say, depends on one’s point of view. I say no. PayPal is conducting its business and implementing a rule; if you want to continue having an account with and using PayPal, you will have to follow those rules. You may not like those rules, but it’s up to you whether you will follow them or not. If you disagree with the rules, then you will have to find another payment processor.

Many people have said, in threads and such, that PayPal cannot tell them how to spend their money, and PayPal cannot tell them what to read. To the first, I’d say if you have a PayPal account, then to an extent they can tell you how to spend your money — you can use PayPal to spend your money according to certain rules. To the second, PayPal is not telling them what they can or cannot read. They are simply saying that you cannot use PayPal to acquire certain items, in this case, certain types of erotic stories. Don’t like it? Find — or create — another way to acquire them.

Another cry that has gone up is “freedom of expression!” Well yes, in the U.S. we all have that, it’s the First Amendment to the Constitution.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. (emphasis mine)

Notice that you have the right to speech and expression — there is no guarantee that you will have a platform to spread these views. The government won’t stop you from writing, or expressing, and that’s fantastic. But no one private agency or person is obligated to help you sell or otherwise disseminate your speech or expression. If an author submits a work to a publisher and they reject it, that is not censorship, it the publisher making a decision on what they think will sell, or what is a good book.

Amazon does not have to sell anything it doesn’t want to, for whatever reason. As big as Amazon is, it is not the only retailer in the world, or on the internet.

Much of the problem with the specific conflict of PayPal and Smashwords, it seems to me, is that as Coker says in his press release,

“PayPal is designed into the wiring of the Smashwords platform.  They run the credit card processing for our retail store, and they’re how we pay our authors and publishers.  PayPal is also an extremely popular, trusted payment option for our customers.  It is not feasible for us to simply switch to another provider, should such a suitable provider even exist, especially with so few days notice.”

Smashwords is so fundamentally entwined with PayPal that Coker feels the only feasible decision is to go along with PayPal’s demands. One lesson here might be to keep one’s options open, but these are still fairly early net days for e-commerce, and I think these things will change as time goes on, lessons are learned, and more options open up. Still, this is not censorship — Smashwords entered a business partnership with PayPal, and sometimes those don’t work the way you want them to. This is unfortunate, don’t get me wrong. I wish Smashwords had other options, and I wish PayPal wasn’t doing this in the first place. But the fact remains that Smashwords is not the only place to acquire the forbidden-by-PayPal works. It may take more work on the part of those buyers to find them, but it is not illegal and it is not censorship.

In the TeleRead blog, Chris Meadows writes: “who the hell is PayPal to appoint itself the arbiter over what is and is not acceptable to publish?” PayPal is not doing that. PayPal is saying, we do not want our service used to purchase X, Y and Z. PayPal is within its rights to do that, even if we don’t like it. Rules do not equal censorship.

To get back to expression, just as you have the right to expression, PayPal has the right to it as well, even if in the negative sense. Mark Coppack of The TechChat.com left this comment at the-digital-reader blog post above:

PayPal and any private company has the same 1st Amendment rights as the rest of us, and freedom of expression means the right to both say what one wants and NOT say what one doesn’t want. So, if PayPal decides not to engage in transactions around content that they find objectionable, it’s very much within their rights.

Bullying is, perhaps, a better description of what’s going on, but I’m not sure even that applies. PayPal said, we want to conduct our business according to these rules. Smashwords said, albeit reluctantly, okay. If Smashwords had alternative payment method, then they could continue to publish and sell those works. PayPal is saying, we do not want our business used for this. They are allowed to do that. Smashwords does have the option, difficult though it may be to implement, to find another payment processor.

We are guaranteed freedom of speech — we are not guaranteed that anyone will listen; that anyone will disseminate the speech; or that it will be easy to get the word out.

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