PayPal Threatens To Abandon eBook Retailer Over Objectionable Content

PayPal Threatens To Abandon Smashwords

via TechCrunch

As LitReactor Editor Joshua Chaplinsky pointed out back in December, the rise of eBooks has led to the rise of eSmut; electronic tales of erotica that often push the bounds of good taste, and sometimes surpass them.

Now, PayPal is fighting back, which is raising some uncomfortable questions about censorship.

The online payment aggregator recently told several eBook retailers that they had to dispense with content that included rape, bestiality, incest or pedophilia. Any sites that didn't comply could no longer use PayPal as a middleman for payment. 

Mark Coker, founder of Smashwords, posted a letter on the eBook retailer's website, explaining the new Terms of Service. The letter reads, in part:

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. I appreciate their willingness to engage in dialogue. Although they have tried their best to delineate their policies, gray areas remain.

Coker indicates that other eBook retailers were given the same ultimatum, though he doesn't name them. And the letter goes on to describe the gray areas (for example, the prohibition against bestiality "does not apply to shape-shifters common in paranormal romance provided the were-creature characters are getting it on in their human form"). 

But, Coker goes on to make a salient point: "Regardless of your opinion on incest, it’s a slippery slope when we allow others to control what we think and write."

So, LitReactors, tell us what you think. 

Does PayPal have the right to disassociate themselves with sites selling content that is morally objectionable?  

Or is this First Amendment issue--as Coker points out, the top of a slippery slope?

Fight it out in the comments.

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TommySalami's picture
TommySalami from New Jersey is reading Killing Floor, by Lee Child February 29, 2012 - 7:02am

Paypal is not the government. However they can be held liable for trafficking in obscenity. They are protecting themselves.
In fact your ISP very likely has a EULA that says the same things. It's for covering their ass.

MegofMetal's picture
MegofMetal from Swampland is reading Tentacle Dreams February 29, 2012 - 7:31am

Are they going to withdraw their services from booksellers who offer The Bible? Classic books that involve these elements? Bullshit censorship that hurts both readers and writers to no end.

Renee Miller's picture
Renee Miller from Tweed, Ontario is reading The Wolf Gift February 29, 2012 - 8:15am

Meg said it perfectly. I think if they're going to censor based on what they consider obscene, it should cover all genres, rather than discriminating against just one. What they're "banning" on sites like Smashwords can be found in many mainstream, traditionally published novels. The Wolf Gift for example contains bestiality in the form that PayPal considers obscene, so will it still sell that book through its other channels?

I don't like certain themes or content in novels that I read, but it doesn't give me the right to say it shouldn't be there. I don't have the right to make that judgment for everyone else. No one does.

The Key Lime's picture
The Key Lime from Staten Island is reading The Hitchhiker's Guide to the Galaxy February 29, 2012 - 9:27am

PayPal is the worst. They have done a lot to damage their goodwill over the past few months (screwing over needy children and Regretsy, insisting on the destruction of property in order to process refunds...).

There has to be other companies that will process payments online and now would be a good time for them to make themselves known.

jyh's picture
jyh from VA is reading whatever he feels like February 29, 2012 - 9:28am

If incest occurs at some point in a story, that's clearly not the same as a story driven by repeatedly depicting incestuous acts, just as putting ordinary sex in a story does not make it pornographic, nor even necessarily erotic.

Joshua Chaplinsky's picture
Joshua Chaplinsky from New York is reading a lot more during the quarantine February 29, 2012 - 9:48am

What is their position on Bigfoot sex?

jyh's picture
jyh from VA is reading whatever he feels like February 29, 2012 - 9:57am

Leonard?  Really?

ReneeAPickup's picture
Class Facilitator
ReneeAPickup from Southern California is reading Wanderers by Chuck Wendig February 29, 2012 - 10:14am

How would PayPal be held liable for trafficking? PayPal doesn't provide anything but a form of payment. That is like saying that if I use my Visa card to buy illicit drugs that Visa will be held liable.

Further, it's hard to know what is acceptable without reading what they are calling "smut". I think that it's a hard one to take a stand on, but PayPal needs to set clear expectations and give a reasonable time for the retailers to meet them. PayPal is continually finding themselves in positions where they are messing with someone's livlihood and that person is saying "Why cant I get a straight answer?!" This is another one to add to the list.

Joey Eggleton's picture
Joey Eggleton from Alabama is reading Amusing Ourselves to Death February 29, 2012 - 11:48am

So are the going to have to remove the story of King Arthur? He concieved a child with his sister. How about Greek mythology? Zeus raped a girl as a swan, the minotaur's mom banged a bull, LOTS of incest happening in the Meditteranean. Or if you're talking about graphic deptictions, are they going to remove Stephen King? In The Stand, one of the finest epics of the past fifty years, the Trashcan Man gets violated with the barrel of a handgun.

Where do you draw the line? I understand where they're coming from, there is some truly outrageous material out there with no literary value. Of course, there's some truly outrageous material with plenty of literary value. But more to the point, why does Paypal feel it's their place to step in? SparrowStark's example was perfect, except I've never known a drug dealer who took anything but cash. They're not risking anything by being the middleman, they have no right to censor anybody.

Kirk's picture
Kirk from Pingree Grove, IL is reading The Book Of The New Sun February 29, 2012 - 1:39pm

How would PayPal be held liable for trafficking? PayPal doesn't provide anything but a form of payment. That is like saying that if I use my Visa card to buy illicit drugs that Visa will be held liable.

Actually, in the world of online sales, Visa does have very strict rules in regards to content. For instance, if you open a porn site (which is totally legal, by the way) in order to accept credit cards you have to first find a processing company. The government has a long history of going after the companies and literally seizing their money. As a result, there are only a handful of processors that will allow you to take payments for porn sites and most of them are offshore.

Once you're lucky enough to find a processor who will accept your charges, Visa then has to do an audit to make sure your content is within their regulations. Basically, they want to be sure that if some bills were to get introduced, changing the definition of "obscenity", they wouldn't be in deep shit with the gov.

Paypal, is essentially trying to cover their asses in the same way. And as a matter of fact, they don't allow the sales of "adult" services or products. Which is oddly why you can buy porn on eBay but you can't use Paypal to pay for it. 

Now the truth is, Smashwords is probably an exception to this rule but when you're such a big company, you sometimes have to make blanket rules so people can't skirt around them.

If I had to guess, Smashwords is just too small of a company for Paypal to care. Once you consider that anyone can sell things through them, there is a pretty big potential liability for everyone involved.

Fortunately, the solution is pretty simple. Don't use Paypal. They may lose a few potential sales but it isn't the sort of thing that should end their business.

MegofMetal's picture
MegofMetal from Swampland is reading Tentacle Dreams February 29, 2012 - 9:37pm
misterwoe's picture
misterwoe from Kansas but living in Athens, Greece is reading Perdido Street Station by China Mieville, Inside the Third Reich by Albert Speer, A Wolverine is Eating My Leg by Tim Cahill February 29, 2012 - 11:26pm

I thought obscenity trials were a thing of the past. Howl and Naked Lunch were I believe some of the last cases. Does this mean I should cut out the animal gang rape scenes in my new book? And am I to understand necrophilia is okay? What about books with traditional sex? PayPal will still work with titles infested with orgies, mirror masturbation, and Old Folks Home viagra scenes? Notice they say nothing about extrateresstial copulation either. So yeah, plenty of gray areas. To hell with PayPal, we'll write whatever we want. I don't give a shit what anybody thinks, it's my book.