PayPal’s User Agreement Difficulty Deepens

PayPal's User Agreement Difficulty Deepens

PayPal’s user agreement scandal continues as prominent American legislators pile on against the company. Despite the difficulty of appending “-ghazi” or “-gate” suffixes to the scandal, its perceived breaches of privacy rights are now putting it in the realm of political controversy.

To recap: Some of the language in PayPal’s new user agreement suggests that customers must consent to receiving robocalls from the company and its affiliates. It caused some outrage when it was first spotted, and subsequently drew complaints from the FCC, which sent a letter to PayPal indicating that the user agreement may be in violation of the law. Now, prominent senators have sent a letter to the company arguing against these user agreement terms – senators including Al Franken, who had used PayPal to accept donations when campaigning for re-election last year.

In acknowledging receipt of the FCC letter on Tuesday, PayPal suggested that its executives “look forward to responding“, and it seems fair to presume the company has similar sentiments about the senators’ letter. Some kind of capitulation seems very likely at this point, as the company is in an important branding stage as it positions itself as a mobile commerce and payment leader in preparation for its breakaway from parent company eBay, and as such it will want to avoid extended controversy and bad press.