Paypal share price drops after backlash over misinformation policy

  • PayPal stock fell 6% on Monday following the company’s botched update to the acceptable use policy.
  • The company faced backlash over the weekend after its updated policy called for a $2,500 fine.
  • PayPal has since rolled back the update, saying its misinformation policy was incorrect.

PayPal stock fell 6% on Monday after the company botched the rollout of an updated acceptable use policy that included stiff fines for promoting misinformation.

The new acceptable use policy expanded the company’s list of prohibited activities on its platform to include “sending, posting or posting any message, content or material” that “promotes misinformation”.

Users who violated the policy would have been subject to a fine of $2,500 which PayPal would automatically debit from their account. The policy was originally scheduled to take effect on November 3.

But the updated policy created a social media storm over the weekend, with several former PayPal employees speaking out and criticizing the policy, including PayPal co-founder Elon Musk.

Former PayPal President David Marcus tweeted“It’s hard for me to openly criticize a company I loved and gave so much to. But @PayPal’s new AUP goes against everything I believe in. A private company can now decide to take your money if you say something she doesn’t agree with. Insanity.”

PayPal immediately rolled back its policy update to exclude the new misinformation policy. The company told media, “PayPal does not fine people for misinformation and the language was never intended to be inserted into our policy.” The payment platform said the policy update “was released in error and contained incorrect information.”

Despite PayPal’s about-face, the damage has already been done. Elon Musk replied to Marcus’ tweet with “Okay.” As the backlash grew, calls to delete your PayPal and Venmo accounts in protest grew, and “BoycottPayPal” trended on Twitter.

PayPal’s share decline on Monday adds to its 4% decline on Friday. The stock is down more than 50% since the start of the year and 72% from its record high.

Karen J. Nelson