PayPal Demands That Seafile Monitor Customers Uploaded Files

DomainBop

Dormant VPSB Pathogen
PayPal is apparently turning into big brother and demanded that Seafile monitor files that customers upload to its hosted Seafile service as a condition for accepting PayPal.  SeaFile refused and so PayPal will no longer be an option for Seafile services as of tomorrow June 19.


The big question is will PayPal start demanding that other cloud storage providers like Dropbox and hosted OwnCloud, (or regular webhosts or openstack object storage providers for that matter) monitor their customer's files, or is this an isolated incident where some idiot at PayPal confused SeaCloud, a file storage/sync provider, with file sharing sites like YouTube ?


+1 to Seafile for telling PayPal to go eff themselves.


source: https://seafile.de/en/important-infos-about-app-seafile-de-and-licensing-purchases-through-our-web-shops/

From tomorrow, Sunday June 19th 2016 we are no longer allowed to accept payments via PayPal. PayPal has demanded that we monitor data traffic as well as all our customers’ files for illegal content. They have also asked us to provide them with detailed statistics about the files types of our customers sync and share on https://app.seafile.de


Since complying with this demand would violate German / European data protection laws (and also be morally wrong in our opinion) we have declined to comply with this demand.


PayPal has notified us on June 14th that we have time until June 19th to remove PayPal as a payment method and all mentions of PayPal from our web sites.


For this reason we have to terminate all PayPal subscriptions for any purchases onhttps://shop.seafile.de and https://shop.seafile.com during the course of the day.


Please don’t worry about your data or your cloud account. We will not close any accounts. We will also continue our service on https://app.seafile.de – just without PayPal payments.


We are currently looking into other payment providers and hope to find a solution for the issue as soon as possible. Until we found one, you can keep using your existing cloud account. It’s just not possible to order new ones at the moment.


We apologize for any inconvenience this has caused you.


The backstory


We were first notified about a “violation of the PayPal terms” on June 2nd 2016. PayPal sent us 16 questions to answer about the details of our business plan. These questions seemed to target file sharing or torrent services. We tried to answer them as good as we could and also tried to explain to PayPal that we are not a file sharing or torrent service but offer a file sync and share service similar to Dropbox.


After answering all their questions as good as we could but clearly stating that we do not monitor our customers’ data and that doing so would violate German / European data protection laws we had to wait for two weeks to receive an answer.


PayPal’s answer reached us on June 14th stating to solve the current “conflict” we would have to remove PayPal as a payment method. Now, in our opinion this doesn’t resolve this so called “conflict” at all so we tried once again to speak to PayPal and explain our situation. The PayPal service representative we had on the phone was very surprised about the whole situation and told us that this would likely be some kind of misunderstanding. Since other sync and share services are allowed to offer PayPal, there should be no reason why we should be treated differently.


But on the next day someone from PayPal’s brand risk management team called us to confirm the original decision and said we indeed have to remove PayPal as a payment method until June 19th. That other similar services are allowed to use PayPal doesn’t matter to them. That some of them even use Seafile also doesn’t matter. PayPal makes these types of decisions on a case by case basis and in our case have decided to not allow us to use PayPal any longer. This decision is final and cannot be appealed or cross checked by a second reviewer.
 
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HalfEatenPie

The Irrational One
Retired Staff
I don't know to be honest.  I know there's always two sides of the story and whatnot, but if this is true then this is absolutely ridiculous.  


I'd be interested in hearing Paypal's reasoning behind it. 
 
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drmike

100% Tier-1 Gogent
Can't monitor stuff.  That's just immoral digging into crap and then viewing to confirm.


Had to be about piracy.
 
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RLT

Active Member
German illegal content USA illegal content or Dutch illegal content? Different things for each so what would it be? In Germany anything Nazi is usually illegal but fine in  the USA.
 

DomainBop

Dormant VPSB Pathogen
What is seafile and what is it known for / what is its reputation? ie is it like aws but for pirates?
Seafile is file syncing/storage software (with features similar to Dropbox, Google Drive, or OwnCloud).  The software is offered in two versions: a free community version (open source) and a paid Professional version (the Pro version of the software has a few more features and uses a proprietary license).    Seafile has end-to-end client side encryption and is generally considered much more secure than OwnCloud.


Seafile is available as either self-hosted or SaaS (Seafile's SaaS service uses the pro version).  


Prometeus uses the free open source version of the software to power their IWsea Cloud Storage product.  
 
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DomainBop

Dormant VPSB Pathogen
Update 2016/06/22


Yes, our PayPal account has been re-instated. PayPal called us this afternoon to apologize for the frustration and inconvenience that restricting our PayPal account has caused us. They said they made a mistake in our case. We are not a “high risk business” and sufficiently explained our business model to them when they asked us.


Theoretically we could accept PayPal payments again. But the whole situation has left a bad after taste. It just felt very wrong when we had to cancel all existing subscriptions last Saturday. We appreciate PayPal for apologizing and being so honest about the fact that they’ve made a mistake. But the whole incident has shattered our trust in PayPal. We just can’t imagine how we should be able to trust PayPal again after what has happened. That’s why we are currently still looking into alternatives.
In the words of Seafile's CEO in an interview with Fortune, it took a public outcry to get PayPal to realize their mistake :)

“In my opinion, they realized all the waves it caused and they’re trying to do some damage control. They wouldn’t have changed their mind if so many people weren’t yelling. I appreciate the gesture on their part, but for us the trust is gone.”


http://fortune.com/2016/06/22/paypal-seafile-monitoring/
I'm sure that she is wrong about PayPal just doing damage control because it looks like the 9 people on PayPal's board of directors include some very fine individuals who are noted for looking out for the interests of small business and the little guy.  Most importantly, PayPal's board includes an individual, Dave Dorman who is a noted fierce champion of privacy rights: 


Upstanding Citizens on PayPal's Board of Directors:


David W. Dorman (former CEO of AT&T, one of the first things he did as AT&T CEO was to enter into an illegal agreement to start secretly handing over customer metadata to the NSA around 2003-2004 which resulted in EFF filing a lawsuit, Hepting v. ATT, against ATT for violations of customer privacy in 2006)


John J. Donahoe (former eBay CEO, during his 7 years at the helm he tried to change the company's focus from being a marketplace of small sellers to a marketplace where large retailers could unload their crap while small sellers were treated as second class citizens and got crapped on)


Jonathan Christodoro, head of Icahn Capital (which has a long history of  buying stakes in companies and laying off tens of thousands of American workers.  On the plus side for movie lovers, Carl Icahn was one of the inspirations for the character Gordon Gecko)  


David M. Moffett  (was CEO of secondary mortgage lender Freddie Mac when the mortgage crisis hit in 2008. Mom and Pop on Main Street got screwed during the housing crisis, and Dave's friends got bailed out)
 
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drmike

100% Tier-1 Gogent
In the words of Seafile's CEO in an interview with Fortune, it took a public outcry to get PayPal to realize their mistake :)


I'm sure that she is wrong about PayPal just doing damage control because it looks like the 9 people on PayPal's board of directors include some very fine individuals who are noted for looking out for the interests of small business and the little guy.  Most importantly, PayPal's board includes an individual, Dave Dorman who is a noted fierce champion of privacy rights: 


Upstanding Citizens on PayPal's Board of Directors:


David W. Dorman (former CEO of AT&T, one of the first things he did as AT&T CEO was to enter into an illegal agreement to start secretly handing over customer metadata to the NSA around 2003-2004 which resulted in EFF filing a lawsuit, Hepting v. ATT, against ATT for violations of customer privacy in 2006)


John J. Donahoe (former eBay CEO, during his 7 years at the helm he tried to change the company's focus from being a marketplace of small sellers to a marketplace where large retailers could unload their crap while small sellers were treated as second class citizens and got crapped on)


Jonathan Christodoro, head of Icahn Capital (which has a long history of  buying stakes in companies and laying off tens of thousands of American workers.  On the plus side for movie lovers, Carl Icahn was one of the inspirations for the character Gordon Gecko)  


David M. Moffett  (was CEO of secondary mortgage lender Freddie Mac when the mortgage crisis hit in 2008. Mom and Pop on Main Street got screwed during the housing crisis, and Dave's friends got bailed out)
4 reasons why I won't be using PayPal in the future.
 

drmike

100% Tier-1 Gogent
On the positive side their board also includes Pierre Omidyar who put up the initial $250 mill to start 501(c) FirstLookMedia/The Intercept 
Omidyar is far from a basket of good.  No soothing feeling from his name being on the positive side.
 
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