Polish Watchdog Fines Paypal EU $27.3 Million For Ambiguous Contract Clause

The antitrust and consumer protection watchdog of Poland fined Paypal EU for a whopping sum of $27.3 million for having failed to specifically inform consumers in the clauses of the contract as to what particular activities can warrant a fine, UOKiK stated on Monday.

Reuters reported that, based on UOKiK findings, that the contract did not clearly state the prohibited activities that would force users to incur penalties. The regulations were described in an unclear manner, the group said.

Users may not clearly understand things that they were not supposed to do, the UOKik said, nor the resulting actions the company would take in the event that a prohibited activity is committed.

"PayPal clauses are general, ambiguous and incomprehensible. When reading these provisions, a consumer cannot predict which of their actions may be considered prohibited, or what sanctions may be imposed on them by the entrepreneur," said Tomasz Chrostny, the head of UOKiK stated.

"Therefore, PayPal has an unlimited possibility to decide at will whether the user has committed a prohibited act and what penalty they will face for it, which may be, for example, blocking money on the account," Chrostny added.

UOKiK noted, however, that the ruling is not yet final and PayPal can still appeal the said decision in court, AOL noted.

In an email by the company, PayPal stated that it was committed to treating its customers fairly and to "giving them accurate, easy to understand and transparent information."

It also added that it has been closely working with the company all throughout the investigation and has also been reviewing the announcement by the body.