Is PayPal Discriminating Against Gay-Oriented Websites?

Jeff Berg
LOS ANGELES — Just as PayPal resolved the technical problems that plagued it in the last week, new reports have begun to circulate suggesting that the Internet payment processor may be narrowing its acceptable use policy to exclude gay mainstream websites, XBiz was told Friday.

Since July, several mainstream companies that target gay audiences, including a book publisher and a group of business consultants, have been dropped by PayPal for violating its acceptable use policy, even though the businesses are not sexually oriented. BadPuppy.com and its subsidiary sites, including well-known gay news website GayToday.com, were also dropped.

“This policy is of such abject stupidity that it’s complete bullshit,” Perry Brass, owner of Belhue Press, told XBiz Friday. “It could have come directly out of the Bush Administration.”

According to Brass, an award-winning author of, among other things, gay romance novels, PayPal told him that it decided to terminate his account because his website had covers from some of his books on it.

“They said the problem was that individuals were touching one another,” said Brass. “But the pictures on the covers of these novels aren’t any different than straight romance novels.”

Amanda Pires, a spokesperson for PayPal, said that PayPal does not have a policy that discriminates against sexual orientation.

Although she was unable to comment on specifics at deadline, Pires told XBiz that the accounts were probably closed because of a violation of PayPal's acceptable use agreement, which includes prohibitions against products that feature full-frontal nudity.

According to the acceptable use policy, the company prohibits, “any material or services suggesting sexual activity, any material or services designed to sexually arouse the viewer or reader, [and] non-adult services whose website marketing can be reasonably misconstrued as allowed adult material or services to be purchase using PayPal.”

"The point of [shutting down the accounts] is not to discriminate against sexual orientation," said Pires. "The point is that we're trying to deter people from violating the acceptable use policy."

Pires also pointed out that PayPal's decision to close down accounts that deal in adult-oriented material was a business decision and not a moral one.

"When we exited doing business with the adult entertainment industry, it was because of the risk and fraud that seem to be common in it," Pires said.

According to Pires, the risk involved in dealing with the adult industry was too great to justify.

Also dropped by PayPal was H.I.M. Corp., whose website reads, “Your Gay and Lesbian Business Consultants.”

“Connecting businesses, large and small, with the Gay & Lesbian Marketplace,” reads the H.I.M. Corp. website. It also says the company offers “turn-key software solutions” for gay businesses.

Matt Skallerud, president of H.I.M. Corp., stated that the only possible websites that may have had adult-material on them would be two personals websites that his company runs. However, the content on those sites would only be available to members.

“I can only assume that they consider these sites adult by their very nature [of being gay] and not because there was actually adult material in them,” Skallerud told online newsletter PressPass Q in September.

“This is purely an attempt to censor websites,” said Brass. “My site hasn’t changed since it was originally reviewed when I joined PayPal.”

Brass also questions PayPal’s actions after they notified him, suggesting that the company engaged in doubletalk and contradictions in its dealings.

“First, I got an email saying that the PayPal account for my website had been terminated. Then, when I went out to check my account, it said it was on ‘limited usage,’ which basically meant that they’d keep all money from my website for six months,” said Brass. “To get the account reinstated, they said I’d have to remove all the book covers and sign an affidavit saying I’d never violate their policy again.”

“I basically told them to go to hell,” Brass said.