Is PayPal Preparing To Reverse Its Erotica E-book Stance? The EFF Has A ‘Good Feeling’

A development in the ongoing story about PayPal and requirements it made on e-book distributors to remove certain kinds of erotica from their catalogs: there are signs the eBay-owned company could be preparing to reverse its position as early as this week, according to the Electronic Frontier Foundation.

The digital rights group has been among those meeting with the payments company in recent weeks, as part of a process to get PayPal to reconsider its decision. The last meeting between the EFF and PayPal was on Friday, and its activism director, Rainey Reitman, told TechCrunch that she left with a “good feeling,” with PayPal’s general counsel indicating that they would be “discussing it internally and might even be able to make a public statement in the next week.”

The EFF, she notes, specifically has requested that PayPal “update their policy so that this type of legal fiction would not be affected.”

The news — or potential news — caps off a tumultuous few weeks for the payments company over its role in deciding what content is appropriate or not to sell via its payment system.

The story started in February, when PayPal issued a mandate to e-book distributors requiring them to remove from their catalogs erotica that contained references to bestiality, rape and incest — or else face a ban on doing business with PayPal. (I wrote about it early on here.)

Mark Coker, owner of one of the sites affected, Smashwords, disagreed with the mandate but also noted that his hands were tied with complying:

“It is with some reluctance that I have made the decision to prohibit incest-themed erotica at Smashwords,” he wrote at the time in an open letter to Smashwords’ partners.

That’s because PayPal plays such a big role in how the company is run: it’s used not only for book purchases, but it’s also how he pays authors, Coker told me today.

Coker also told me that in fact less than one percent, 1,000 books, of his company’s catalog were affected, but that such mandates on what is essentially legal fiction (even it’s not your own cup of tea) is a “slippery slope.”

And it turned out that the issue became a slippery slope in itself, with the news then getting picked up by Reuters, Forbes and a number of other blogs. The EFF, meanwhile, launched a letter-writing service to protest what it described as “holding free speech hostage by clamping down on sales of certain types of erotica.”

The PR situation was not helped last week, when it emerged that PayPal was partly laying the blame at the credit card companies. But at least one, Visa, washed its hands of that: “Visa had no involvement with PayPal’s conclusion on this issue,” it told Madeline Morris at the Banned Writers blog.

With public reaction to the mandate mounting, PayPal approached Coker and others like the EFF to discuss ways of working through the issue.

To be fair, PayPal has since also tried to make further clarifications itself: “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,” its head of communications, Anuj Nayar, wrote on the company’s blog. “But we draw the line at certain adult content that is extreme or potentially illegal.” It then specified that certain erotica with pictures might fall on the wrong side of that line.

Complicated and confusing? Yes. And as Coker notes, partial concessions will likely only more questions now and in the future. “If they don’t go all the way [and reverse this mandate] this issue will just get reopened,” he told me today.

Now, it appears, PayPal may be thinking along those lines, too.

We have reached out to PayPal and will update this story as we learn more.

[image: SiGMan, Flickr]