- PayPal Europe uses prohibited provisions – stated the President of the Office of Competition and Consumer Protection in the latest decision.
- A very general list of prohibited activities and severe sanctions for users, including financial ones, for violating the terms of the contract – these are only some of the challenged provisions.
- For such serious violations, a fine of over PLN 106 million was imposed on the company.
PayPal is an online service that allows you to make online payments around the world and acts as an electronic wallet integrated with your bank account. After the proceedings, the President of the Office of Competition and Consumer Protection issued a decision in which he found that PayPal uses prohibited clauses and banned their use. The fine amounted to PLN 106.6 million.
PayPal sanctions under the supervision of the Office of Competition and Consumer Protection
The President of the Office of Competition and Consumer Protection questioned the provisions in the "PayPal User Agreement". Doubts were raised by clauses containing 34 activities prohibited to users and a catalog of sample sanctions. Among them were, among others: provisions stating that the user will be punished even for trying to use a blocked account. PayPal also assumed that it must not "violate any laws, acts, orders or regulations (e.g. regarding financial services, consumer protection, unfair competition, prohibition of discrimination and unfair advertising)", because this may result in the imposition of unspecified sanctions. In practice, violating any regulation in any country entitled PayPal to impose sanctions. The breach could even be unrelated to the use of a PayPal account, leaving consumers unaware that they had done something inconsistent with their contractual terms.
PayPal could impose even several sanctions on a consumer at the same time
The open catalog of sanctions provided for in the contract, which were not related to individual violations, meant that the company's decisions were arbitrary. For example, it could "at any time" and "at its sole discretion" block the user's money "in such amount and for as long as necessary." Moreover, PayPal could impose several sanctions on the consumer at the same time: payment of USD 2,500 or more, closure of the account without notice and refusal to provide future services.
According to the President of the Office of Competition and Consumer Protection, the application of the questioned conditions could lead to a situation in which the consumer was, on the one hand, unaware of what actions might be considered prohibited by the company. On the other hand, he was unable to predict the sanctions that might be applied to him. The result could even be deprivation of access to the money accumulated in your PayPal account for an indefinite period of time.
Provisions included in regulations or contracts must be clear and understandable to the consumer.
– The nature of the violations is unprecedented. For a consumer, the use of PayPal services on the basis of the disputed clauses is unpredictable. PayPal's clauses are general, ambiguous and incomprehensible. When reading these provisions, the consumer cannot predict which of his actions may be considered prohibited, or what sanctions may be imposed on him by the entrepreneur. Therefore, PayPal has unlimited freedom to decide whether the user has committed a prohibited act and what punishment he or she will face for it, which may include blocking the money in the account – says Tomasz Chróstny, President of the Office of Competition and Consumer Protection.
PayPal (Europe) is to inform consumers about this on its website after the decision becomes final. The decision is not final and the entrepreneur may appeal to the court.
