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Under US Pressure, PayPal Stops Working With Mega
New submitter seoras sends news that PayPal is now refusing to handle payments for Mega, Kim Dotcom's cloud storage service. A report (PDF) issued in September of last year claimed Mega and other "cyberlocker" sites made a great deal of illicit money off piracy. Mega disputes this, of course, and says the report caused U.S. Senator Patrick Leahy to pressure credit card companies to stop working with Mega. Those companies then pressured PayPal to stop as well. The hosting company claims, "MEGA provided extensive statistics and other evidence showing that MEGA’s business is legitimate and legally compliant. After discussions that appeared to satisfy PayPal’s queries, MEGA authorised PayPal to share that material with Visa and MasterCard. Eventually PayPal made a non-negotiable decision to immediately terminate services to MEGA."
It is ever so slightly possible, that Paypal is sounding the alarm, here. Here's the key phrase...
"...but PayPal has advised that MEGA's 'unique encryption model' presents an insurmountable difficulty,"
It looks like Paypal fought to keep MEGA as a customer. But "somebody" put the screws to them, and forced them to break contract with MEGA.
That's no small thing. Corporate contracts are a bit more "customer friendly", and simply dumping a corporate customer isn't quite as easy as it is to dump people like you and me. MEGA could take Paypal to court with a valid argument over breaking that contract.
What are they going to say? What would be their excuse? "We don't like encryption."??? No judge would buy that.
Based on what we're seeing, Paypal's previous history aside, it sounds rather like Paypal got served a National Security Letter telling them to dump MEGA.
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