From Torrent Freak:
Most recently, PayPal took action against Soulseek, a file-sharing network that’s mostly used for sharing music. Soulseek has been around for a decade and a half, when Napster was still in its prime and years before BitTorrent came around.
The Soulseek client that was targeted had been using PayPal to receive donations for 14 years. It never ran into trouble and PayPal even sent personal Christmas cards to the operators, but a few weeks ago things changed.
“PayPal suddenly and unceremoniously decided to end a very friendly working relationship with us that lasted 14 years,” Soulseek’s Roz and Nir Arbel explain.
The San Francisco based Soulseek team tried to get more information on the sudden change of heart, but without much luck.
“We have asked repeatedly for an explanation of this behavior, but we have been stonewalled at every turn, and have received only form emails telling us that we needed to be ‘pre-approved’ for an account,” they explain.
While PayPal doesn’t want to comment in detail, Soulseek appears to be classified under the “file-sharing” category now. These type of sites and services have to adhere to strict rules.
This policy has been in force since 2012 and has resulted in PayPal banning many file-sharing related services.
In the case of Soulseek it would have been hard to ask for pre-approval as they were already a user many years before the policy came into effect.
That said, PayPal has made it clear that Soulseek is not allowed to use their services anymore.
“When we asked what we need to do to be pre-approved, they emailed back and said that they are ‘not granting pre-approval at this time’,” the Soulseek team notes.
Soulseek is not the first company to be banned by PayPal’s rigorous policy, and it won’t be the last. Another service that suffered the same fate recently is the TV-guide Myepisodes.com.
Even though the service doesn’t link to or host any infringing material, it was kicked off due to a “copyright issue” and because wasn’t “pre-approved.”
While PayPal hasn’t commented on the disconnections in public, it seems likely that it took action after complaints from copyright holders or industry groups, who fear that file-sharing related sites and services hurt their revenues.