PayPal Policy Raises Question: Content Sanitized for Whose Protection?

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It's a fascinating aspect of modern culture that even as we gain ever greater access to information, news and entertainment there are puritanical groups in our society who repeatedly attempt to push us back to some better, nicer, safer, prudish and, in many ways, more ignorant society. And the villain in the quest to "clean up Dodge" is not always who it might appear to be.

By way of example, consider the following saga: In mid-February PayPal contacted online e-book retailers to warn them it in one week the company would begin enforcing a new policy that prohibited the sale of certain forms of erotica.

TECH ARGUMENT: E-books vs. print books

One of the companies affected by the new PayPal policy was Smashwords, a tremendously successful publisher of e-books created by independent authors and publishers. The company makes it possible for anyone to digitally publish and distribute e-books to leading retailers, including Apple, Barnes & Noble, Sony and Kobo, and its catalog contains a huge range of topics of which erotica is but one small section.

Specifically, PayPal was banning works of fiction ... note that's fiction as in "made up" and "not real" ... that described "bestiality, rape-for-titillation, incest and underage erotica" from being paid for through PayPal services.

While it might sound reasonable to ban such distasteful topics there are two big problems with PayPal's demands that the Internet community has reacted strongly to: The first problem is that of definition. Which works of erotica are acceptable and which are not? Secondly, PayPal is asking for Smashwords to stop selling works that are not, in fact, illegal. The works may be considered immoral, unethical, vulgar, crude, or however you see them, but they are legal to create, offer for sale, sell and buy.

What this all boils down to is a problem with free speech. Sure, PayPal is a private business and, as such, can choose the terms under which it will do business with anyone. Unfortunately, when you're as big as PayPal, what you do has a far more profound impact on society.

Here's how Mark Coker, Smashwords CEO, explained PayPal's demands on its blog:

"On Saturday, February 18, PayPal's enforcement division contacted Smashwords with an ultimatum. As with the other ebook retailers affected by this enforcement, PayPal gave us only a few days to achieve compliance otherwise they threatened to deactivate our PayPal services. I've had multiple conversations with PayPal over the last several days to better understand their requirements. Their team has been helpful, forthcoming and supportive of the Smashwords mission. ... Although they have tried their best to delineate their policies, gray areas remain."

With such a small window to work in, changing payment processors was obviously not an option so Smashwords had no choice but to change its terms of service.

In response to the Internet community's criticisms of PayPal's policy, the company responded in its official blog on March 8 with the following comments penned by Anuj Nayar, PayPal's director of communications:

"There's been some chatter about PayPal's decision to not allow the sale of certain 'erotica' content using our service. Specifically, PayPal doesn't allow our service to be used to sell content relating to rape, incest and bestiality. We'd like to set the record straight."

Nayar's assertion of there being "some chatter" was disingenuous and deviously dismissive, to say the least. His post continued:

"Here are the facts. Unlike many other online payment providers, PayPal does allow its service to be used for the sale of erotic books. PayPal is a strong and consistent supporter of openness on the Internet, freedom of expression, independent publishing and eBook marketplaces. We believe that the Internet empowers authors in a way that is positive and points to an even brighter future for writers, artists and creators the world over, but we draw the line at certain adult content that is extreme or potentially illegal.

"An important factor in our decision not to allow our payments service to be used to purchase material focused on rape, incest or bestiality is that this category of eBooks often includes images. / This type of content also sometimes intentionally blurs the line between fiction and non-fiction. Both these factors are problematic from a legal and risk perspective."

That's an interesting argument -- you can't sell any e-books in these genres because the material "often includes images"?! If this was just about what PayPal considered to be unacceptable images it would have been one thing, but to ban all fiction of a genre because it might include images you object to is like burning down a house to get rid of termites you think might be there. And the assertion that these works of fiction "intentionally [blur] the line between fiction and non-fiction" is ludicrous! They are works of fiction and any blurring would have to be in the mind of the reader.

Worse still, this is simply a devious way to implement censorship because there's a big difference between images that are deemed unacceptable by some person or organization and images that are, in fact, illegal.

So, by saying that PayPal refuses to deal with products that aren't illegal, the company was, in effect, trying to act as a censor and thus gave e-book retailers a tough choice: Do as we say or let your business take a financial hit while you look for another payment processor.

Of course, Nayar's post framed its position with the usual corporate weasel words:

"We have not shut down the e-book publishers and are working with the small number of affected merchants to come to a mutually agreeable solution that allows maximum freedom of expression, while protecting PayPal from the brand, regulatory and compliance risk associated with this type of content. / We hope that our customers enjoy the services and features that we work so hard to get right and understand that our policies are simply a way to conduct business in a fast-paced world."

That last sentence is the worst kind of corporate bunk ... as if a whine of "we're just trying our best" really cuts it as an explanation.

But lest you think that the driving force behind PayPal's pressuring booksellers to dump certain book genres was, in fact, PayPal's initiative, Smashwords outlined what's actually behind the whole fracas in another blog posting (the highlighting is mine):

"Over the weekend, many Smashwords authors and publishers demanded we abandon PayPal and find a new payment processor. It's not so simple, and it doesn't solve the greater problem hanging over everyone's head. PayPal is trying to implement the requirements of credit card companies, banks and credit unions. This is where it's all originating. These same requirements will eventually rain down upon every other payment processor. PayPal is trying to maintain their relationships with the credit card companies and banks, just as we want to maintain our relationship with PayPal. People who argue PayPal is the evil villain and we should drop them are missing the bigger picture. Should we give up on accepting credit cards forever? The answer is no. This goes beyond PayPal. Imagine the implications if credit card companies start going after the major ebook retailers who sell erotica?"

Of course, PayPal in its "re-contexturalizing" of its own position frames the matter in a distinctly weasely way:

"Our primary interest in this matter has always been to come to a mutually agreeable solution that allows freedom of expression, while still ensuring PayPal is used in ways that fully comply with applicable laws and our policies."

We know what "applicable laws" means ... it's that tricky area that involves First Amendment rights and the definition of illegal porn is "text and obscene images ... as defined by the U.S. legal standard for obscenity: material that appeals to the prurient interest, depicts sexual conduct in a patently offensive way, and lacks serious literary, artistic, political or scientific value ..."

But what exactly does PayPal's phrase "our policies" mean? I think that's pretty simple -- PayPal's policies are, apparently, those that will please their overlords, the credit card companies, the banks and the credit unions.

So, why should these financial companies care about who publishes, sells and handles the financial transactions for authors of erotica? Why are they concerned with sanitizing the content sold by the businesses they serve? That's something that I'm researching and hopefully will be able to eventually explain because, as of this moment, the rationale for financial companies having finer morals and ethics that aren't related to profit completely eludes me.

So, let's be clear about what the problem is with what the financial companies appear to want: Should this cabal manage to ban some poorly defined genres of fiction that are in and of themselves perfectly legal, they are effectively preventing free speech. Certainly most people have no interest in books that describe bestiality, rape-for-titillation, incest and underage erotica, but banning them is a slippery slope because you always have to ask, What's next?

Do you really think that extending prohibitions on what book genres can be sold would end with what the financial institutions appear to be aiming at? Democracy needs more free speech, not less.

The solution to all of this nonsense is simple: Act like an adult. You don't like something, don't buy it. Ignore it. But always respect the rights of others. I don't like any of the "Real Housewives ..." reality series. I think they're coarse, vapid, and display a level of childishness that is epic. Do I want to ban them? No. I simply ignore them.

An adult response to works that we find offensive but that aren't specifically illegal is, and should be, obvious: Don't buy them. Don't look at them. Ignore them.

Of course, the law isn't static and politics will always be trying to change the status quo. While, as always, what will ultimately drive political decisions is money, but popular opinion can, at best, derail bad ideas and, at worst, modify them. That being said, where do we, collectively, draw the line?

It seems reasonable that anyone should be freely able to publish any written work that isn't libelous or otherwise illegal, but what about images that are completely computer generated? If nothing in a still or moving computer generated image is real, can that image be reasonably held to violate a law? Wouldn't that be like saying that what someone thinks is illegal?

Finally, if I can visualize -- purely in my mind -- something that is illegal, am I committing a crime? If I'm not, then if there was a machine that could display what I'm visualizing, would the rendition of my visualization be a crime? If it was, would I now be guilty of a criminal act?

Gibbs is pondering in Ventura, Calif. Your considered thoughts to and follow him on Twitter (@quistuipater) and on Facebook (quistuipater).

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This story, "PayPal Policy Raises Question: Content Sanitized for Whose Protection?" was originally published by Network World.

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