PayPal has done it. It has to pay a fine of PLN 106 million

PayPala global online payment service, was subject to inspection by the Office of Competition and Consumer Protection. After the investigation, the President of the Office of Competition and Consumer Protection imposed a fine on the company a fine of PLN 106,689,453 for using prohibited clauses in user agreements.

Problematic provisions in PayPal’s regulations

The decision of the UOKiK chief concerned clauses in the “PayPal User Agreement”. Doubts were raised by provisions containing a catalog as many as 34 prohibited user actions and the sanctions that could be imposed on them. These clauses were so vague that users they were not sure what activities were prohibited and what consequences they might face.

For example, users could be penalized for attempting to use a blocked account. PayPal also reserved the right to impose penalties for violating any legal regulation in any country, which could result in penalties not directly related to the use of the PayPal account.

Arbitrary sanctions

The next problem was an open catalogue of sanctions provided for in the agreementwhich were not related to specific violations. PayPal could at any time and at your own discretion block the user’s money for an indefinite period of time. The company could also impose several sanctions on the consumer at once, such as paying an amount of USD 2,500 (over PLN 9,700) or more, closing the account without notice and refusing to provide services in the future.

The nature of the violations is unprecedented. For the consumer, using PayPal services based on the disputed clauses is unpredictable. PayPal clauses are general, ambiguous and incomprehensible. The consumer, reading these provisions, cannot predict which of his actions may be considered prohibited, as well as what sanctions may be imposed on him by the entrepreneur. Therefore, PayPal has an unlimited possibility to decide at will whether the user has committed a prohibited act and what penalty he will face for it, which may be, for example, blocking money in the account.

– said Tomasz Chróstny, president of the Office of Competition and Consumer Protection

Consequences of the decision of the President of the Office of Competition and Consumer Protection

In accordance with the decision of the President of the Office of Competition and Consumer Protection, clauses found to be abusive must be treated as if they had never been included in the contracts. PayPal (Europe) is obliged to inform consumers about the decision on its website once it has become final.

The decision is not final. The company has the option of appealing to the court.