PayPal fined by UOKiK for prohibited clauses
“PayPal is an online service that allows online payments worldwide and acts as an electronic wallet integrated with a bank account. After conducting proceedings, the President of the Office of Competition and Consumer Protection issued a decision in which he found that PayPal uses prohibited clauses and prohibited their use. The fine amounted to PLN 106.6 million (PLN 106,689,453)” – we read in the Monday announcement of the Office of Competition and Consumer Protection.
The Office explained that the President of the Office of Competition and Consumer Protection questioned the provisions in the “PayPal User Agreement”. His concerns were raised by clauses containing “34 actions prohibited to users” and a catalogue of sample sanctions, including provisions that penalize a user for even attempting to use a blocked account.
Controversial provisions of PayPal agreement
“PayPal also assumed that it was forbidden to ‘violate any law, statute, order or regulation (e.g. regarding financial services, consumer protection, unfair competition, prohibition of discrimination and unfair advertising)’, because it could end with the imposition of unspecified sanctions. In practice, violating any regulation in any country entitled PayPal to apply sanctions. The violation could even be unrelated to the use of the PayPal account, so consumers could not know that they had done something inconsistent with the terms of the contract,” we read in the announcement.
According to the Office, the open list of sanctions provided for in the agreement meant that the company’s decision was arbitrary. The Office noted that according to the provisions, it could “at any time” and “at its own discretion” block the user’s money “in the amount and for as long as necessary”. The Office of Competition and Consumer Protection noted that PayPal could impose several sanctions on the consumer at the same time: payment of an amount of USD 2.5 thousand or more, closure of the account without notice and refusal to provide services in the future.
Consumer implications of PayPal clauses
“According to the President of the Office of Competition and Consumer Protection, the application of the contested conditions could lead to a situation in which the consumer was, on the one hand, unaware of what action could be considered prohibited by the company. On the other hand, he was unable to foresee the sanctions that could be applied to him. The result could even be deprivation of access to the money accumulated in the PayPal account for an indefinite period of time,” it was indicated.
UOKiK emphasized that provisions included in regulations or agreements must be unambiguous and understandable to the consumer. It added that abusive clauses should be treated as if they were not included in the agreements at all.
The Office also reminded that the decision is not final and the entrepreneur has the option to appeal to the court. (PAP)
