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Netflix geo-blocking crackdown blocks proxy services from PayPal

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It looks like PayPal has taken a side in the growing battle between Netflix and VPN/DNS geo-blocking services.

UnoTelly, a Canada-based Netflix unblocking service, recently revealed via its official blog that PayPal has pulled transaction support for the company’s various products and services.

“On February 3rd, 2016, Paypal has severed payment processing agreement unilaterally and without prior warning,” writes UnoTelly in the post.

“We are disappointed at PayPal’s unilateral action and the way it acted without prior warning. We provide both DNS resolution and secure VPN services. Our services are network relays that connect people around the world,” continued UnoTelly, emphasizing that the only way for customers to pay for its services moving forward is with a credit card.

While proxy services operate in a legal gray area when it comes to accessing geo-locked services like Netflix or Hulu, they’re technically a violation of PayPal’s acceptable use policy, which states, “PayPal may not be used to send or receive payments for items that infringe or violate any copyright, trademark, right of publicity or privacy, or any other proprietary right under the laws of any jurisdiction.”

“This includes transactions for any device or technological measure that descrambles a scrambled work, decrypts an encrypted work or otherwise avoids, bypasses, removes, deactivates or impairs a technological measure without the authority of the copyright owner,” continues PayPal’s terms of use statement.

The issue with the decision is many people take advantage of VPN and DNS services for legitimate purposes related to security and masking their physical location. While proxy platforms give users the ability to access video content platforms they otherwise wouldn’t be able to, they also have various security related purposes as well.

Moving forward, it’s unclear if PayPal has plans to cut ties with all proxy services, though as indicated in the company’s official statement, it seems the payment service will continue to work with proxy services that don’t promote region-switching. PayPal’s recent statement to CBC News seems to back up this claim. “Certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws.”

Unblock-Us, a VPN/DNS service previously located in Toronto that recently moved to Barbados in order to avoid legal issues related to releasing customer information, Tweeted that the company is no longer able to accept payments via PayPal.

Torrentfreak has published a full copy of PayPal’s email to UnoTelly. PayPal’s public response to UnoTelly’s public complaints can be found below.

“PayPal is committed to privacy and it is at the core of our business model. We’re committed to continuously making significant investments in security to protect our complete ecosystem – consumers, merchants and employees. As a global payments company, we also have to comply with laws set by governments and regulatory agencies. PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights. This policy extends to services that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners. In line with this policy, PayPal has recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws. We apologize for any disappointment this may cause our users. 

PayPal will continue to support VPN providers that are operating legally and not marketing their services for unlawful uses. PayPal does not permit use of our services by VPN providers that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners.”

[via]Gizmodo[/via]

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