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It’s been a tough few weeks for PayPal. 

First, the company shut down the account of the Free Speech Union, reinstating it only after many denounced PayPal’s apparently viewpoint-discriminatory decision. Then news emerged that PayPal was amending its acceptable use policy to add several new categories of prohibited speech. Last week, FIREcriticized the proposed changes. Now, PayPal appears to be backing off . . . somewhat, at least.

As we said last week, PayPal’s amended acceptable use policy, which was slated to take effect Nov. 3, would have placed a significant amount of expression out of bounds:

The new policy dramatically expands PayPal’s power to take action against users for activity on the service involving disfavored speech. That includes “any messages, content, or materials that, in PayPal’s sole discretion” are “harmful” or “objectionable,” depict or even appear to depict nudity, “depict, promote, or incite hatred or discrimination of protected groups,” present a risk to a user’s “wellbeing,” “promote misinformation,” or are, in PayPal’s opinion, “otherwise unfit for publication.” 

The amended policy also stated PayPal may fine users $2,500 for each violation of the policy. And PayPal may debit that money straight from user accounts. That particular provision already exists in the , which vaguely bans some expression such as “certain sexually oriented materials or services” and “promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime.” 

The amended policy would have made even more categories of prohibited speech subject to financial penalty.

One day after FIREand called out PayPal’s new speech-chilling restrictions, the company walked back one of them. A PayPal spokesperson notice of the policy changes “went out in error that included incorrect information,” adding that “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy.”

While this clarification sounds like a step in the right direction, it nonetheless raises several questions. Will “misinformation” still be a banned category of speech, just not one subject to a fine? Can PayPal even provide a definition of “misinformation” that isn’t dangerously overbroad and subject to abuse? Is PayPal still going forward with all of the other new, ill-defined categories of prohibited speech? If so, will violating any of those restrictions subject users to thousands of dollars in fees? 

Meanwhile, many have responded to PayPal’s censorship by saying they will no longer use the service. But some are PayPal won’t let them close their accounts. 

PayPal removed the amended acceptable use policy from its , and it has yet to replace it with a newly amended policy. We will watch the company’s next moves closely.