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PayPal blocks VPN payments, blames copyright infringement

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PayPal

VPN providers might be hugely popular, but PayPal is refusing to play ball.

PayPal is no longer accepting payments on behalf of companies offering VPN services because it says they enable copyright infringement.

The company confirmed to TrustedReviews that the decision is an extension of its existing policy to only service lawful operations.

A PayPal spokesperson told us:

“As a global payments company, we have to comply with laws set by governments and regulatory agencies. PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights”

“This policy extends to services that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners.”

“In line with this policy, PayPal has recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws. We apologize for any disappointment this may cause our users.”

paypal

Related: Best VPNs 2016

A VPN, or virtual private network, allows a user to connect to private networks using a public network like the internet.

As such, VPNs allow users to connect to proxy servers to hide identity, secure transactions, and to circumvent certain restrictions.

They were popularised as a method of getting around location blocks enforced by streaming services like Netflix and BBC iPlayer.

However, due to the nature of licensing agreements, circumventing these location restrictions is copyright infringement.

PayPal’s stance is that because companies offering VPN technology are “intentionally enabling” copyright infringement, it will no longer provide payment service to those platforms.

We were first made aware of the issue after receiving an e-mail from Nicholas Lin, the founder of UnoTelly – a very popular VPN service.

“On February 3, 2016, Paypal severed payment our processing agreement unilaterally and without prior warning,” Lin told us. “PayPal indicated that UnoTelly is not allowed to provide services that enable open and unrestricted Internet access.”

unotellyUnoTelly homepage

He continued: “As a result, UnoTelly can no longer accept payment from PayPal. This development is outside of our control, and I sincerely apologise for the inconvenience.”

UnoTelly representatives claim the company was never informed of PayPal’s moratorium on VPNs, which makes it difficult to appeal the decision.

Speaking to TrustedReviews, Kostas Polichronos, PR manager of UnoTelly, said: “We haven’t been informed about this and as a result we do not know why PayPal decided to cut us off. Furthermore, since we have not been informed about this, there is no email from PayPal to provide.”

“We can only accept credit card payments at the time being but I want to let you know that we are working on adding alternate payment methods in the coming weeks,” Polichronos added.

Do you think PayPal has made the right decision? Let us know in the comments.

MontyMole

February 6, 2016, 6:15 pm

That's quite some moral high ground paypal are taking here. Quite extraordinary really. They are pretty much saying that all VPN's are illegal and are deciding to ignore all legitimate VPN users that use a VPN for security. A very unusual stance.
Anybody that is using a VPN for criminal purposes would not be paying via paypal anyway. They would have paid by bitcoin. So i don't really understand this new stance. A lot of those who pay with paypal are probably using their VPNs for secure public wi-fi

Incidentally, I just checked and my VPN still accepts paypal at the moment.

TOPDOG1

February 6, 2016, 8:45 pm

Just as soon as I can find a replacement I am going to drop Paypal. The same goes for Netflix. There are better streaming services out there, ones who do not violate civil liberty's. I also suggest everyone else does the same.

Nitelite

February 6, 2016, 11:06 pm

Pathetic. I hate Paypal so much.

Steve Withers

February 7, 2016, 1:46 am

PayPal and credit card companies have lately been the tools of US foreign policy and corporate monopolies.

BitCoin and cash. I'm going there.

Steve Withers

February 7, 2016, 1:52 am

The US and UK governments are both trying to criminalise all privacy. Unfortunately, in the US, voting won't change anything as both parties are owned by corporates. Only a complete change of American political structures toward a more open multi-party parliamentary model will see anything change. For the vast majority of Americans that sort of change is utterly beyond imagining, despite it being the daily reality of almost all of the rest of the democratic countries on the planet.

It's sad, really. Bernie Sanders is the closest thing to a real President that the US has been offered in a long time. Unfortunately, most House and Senate candidates are corporate clones even if Sanders does win.

Melete

February 7, 2016, 1:57 am

Copyright infringement? According to whom smoking what?

bruce lancaster

February 7, 2016, 5:09 am

This is about disney and hollywood... It's about democrats. If you would have said you wanted a libertarian to come to power, I would have believed you actually understood what the problem is and what we are up against.,.. but you support a commie who calls himself a socialist... who is running as a democrat and now I just really, really, really want you to get out of my country. You are so suck... Pathetic and just soooooo suuuuuck.

Edward Yeranian

February 7, 2016, 12:59 pm

I've never liked Paypal very much and don't think it should be dabbling in issues like copyright contentions. Ultimately, people will get tired of Paypal and start using other services.

D.M. Ryan

February 7, 2016, 2:46 pm

Bitcoin! Bitcoin! Bitcoin!

Alistair Houston-McMillan

February 7, 2016, 3:40 pm

Yes. Good on PayPal.

ab1

February 7, 2016, 5:19 pm

Finally, a good use case for BitCoin..

FWIW, if payment providers start blocking well known VPN services, just build your own private smart DNS solution on a cloud service provider and use that.

Amazon EC2, Digital Ocean, Microsoft Azure are just some of the providers your can try.

The process is simple and is documented on GitHub:
http://bit.ly/23RtCjW

Also, I suggest once you find a cloud provider whose IP ranges haven't already been blocked by Netflix, etc., you keep it to yourself.

-- ab1

Merk

February 7, 2016, 11:12 pm

I have nothing good to say about paypal. It's one thing if they think someone is using their service to do something illegal. But they should AT LEAST give these companies 30 days to find an alternative. Just arbitrarily cutting a business off from their means of accepting payments is just business as usual for paypal. I wouldn't trust them since paypal is basically the payment processing version of a bully.

Jeff Murray

February 8, 2016, 2:17 am

Time to find another payment method...

John Doe

February 8, 2016, 5:56 am

says an overpaid fat media exec

Kevin

February 8, 2016, 10:32 am

It's about time copyright was respected on the internet. You have to pay for most things in life. Most peoples jobs rely on others paying for goods or services, it's only fair that the creators get the payment not some money grabbing ahole that's riding on the back of others efforts.

Spike Black

February 8, 2016, 10:42 am

The problem stems from Netflix and other streaming services releasing content at different times in different regions. It's like the bad old days where a dvd for a film or tv show was out in one country but hadn't been released on TV or in the Cinema in another, in some cases that's years or never that's especially the case for Anime. The ones paying for both services were at least paying this could drive some back to the download sites.

MenAreLikeWine

February 8, 2016, 11:11 am

The people using VPN services ARE paying for content.

Alex Walsh

February 8, 2016, 11:47 am

Except the decision wasn't Netflix, it was the rights holders who pressured Netflix in to doing it.

Kevin

February 8, 2016, 1:19 pm

They are not paying the people that created the content, they are paying those that just cream off from the people that deserve it.

Alistair Houston-McMillan

February 8, 2016, 4:30 pm

Lol. I wish I was (except the fat bit). Sure, content creators need to get more innovative about distribution and marketing of their music or whatever it is, but of course people love getting something pirated, for next to nothing. Why should they hate copyright infringement when people aren't stealing their hard work, right?

Kevin

February 8, 2016, 5:43 pm

According to international copyright law, a law that helps to make sure the correct people get paid for doing the work....why would anyone want it any different?

🇦🇺 Marshall

February 9, 2016, 12:02 pm

Bullshìt.

I paid full price to access US Netflix through a VPN. Everyone gets their money and nobody loses, no matter where I happen to be.

Geo-blocking is a toxic dinosaur which needs to be shot between the eyes twice and buried under the old oak in the back paddock.

🇦🇺 Marshall

February 9, 2016, 12:26 pm

PayPal 💥🔫

Visa Checkout ✔

Lars

February 9, 2016, 4:24 pm

Like many others in this debate, I feel sure that it is a result of pressure from different content suppliers who are trying to protect their business models, but – at least in some cases – this is a bit of a paradox!

First of all, the main “source” is probably Netflix – who may be under pressure from various film studios, not least Disney, but if this is true, then we should not forget that exactly Netflix (together with Apple and Amazon) probably is the greatest disrupting factor for the whole content distribution industry, and I for one cannot imagine that Netflix would not welcome other disrupting businesses (irony) – could you?

Second, none of these services, being it VPN, SmartVPN, DNS or SmartDNS services has EVER been convicted of ANY illegal activities in ANY jurisdictions in the world, so when a company like PayPal claim – and I quote – that: “This policy extends to services that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners”, I would expect that they are extremely close to get a libel case to answer – I do not run a service like this, but if I did I would not hesitate to sue PayPal, even though it may be a costly and long lasting affair, especially in a US court, but perhaps it is different in a Canadian or European court!

Thirdly – and I think this show the double standards of PayPal – they do not have any issues with e.g. handling payment for tuning kits for cars which make them run faster, in spite of there being speed limits which say that it is illegal to drive faster than e.g. 70 miles per hour. If that is not a case of “services that unlawfully facilitate infringement”, then I do not know what is, and there are many other cases like this that PayPal do not have issues with handling payments for!

Finally, the EU is in the process of banning geo fencing of content available in 28 member states and a further 3 countries within the European Economic Area, which has association agreements with EU, as “Restrictions of passive sale are contrary to the consumers’ freedom of access to goods and services on the DSM, and are not permitted under European law.” Does that mean that PayPal will block all payments to any company or organisation which does not adhere to this once it has been ratified?

EU have actually initiated an antitrust battle with the biggest players in Hollywood, including Disney, NBC, Universal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Bros – and even included Sky TV for their policies of limiting content and products to consumers in certain areas of EU!

I wonder if PayPal will stop accepting payments to all of these players and “confiscate” the funds that they may have in a PayPal account if they lose this antitrust battle?

Lars

February 9, 2016, 4:29 pm

Alistair, I think you are missing the point, non of the VPN, SmartVPN, DNS or SmartDNS services that I know - including Unotelly - offer pirated services.
They only let people access the sites which holds the content, but the consumer will still have to pay the service provider to access it - read; the consumer actually pays the distributor who are then supposed to pay the rights owners and artists!

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