A unique feature of the web is that it was designed by idealists and capitalists alike. A hacker sensibility fights for an open, democratic structure, while profit-minded businesses helped shape it into a thriving industry. The more successful companies, like Google and Facebook, understand both ethics equally.
But idealism and commerce often clash as well, and woe to the company that is caught in the crossfire. This week, PayPal is such a company. The eBay online-payments subsidiary suspended the account that Wikileaks used to handle donations, citing a violation of terms that prohibit “activities that encourage, promote, facilitate or instruct others to engage in illegal activity.”
The business logic seemed clear enough: Avoid the wrath of the U.S. State Department and steer the company away from the Wikileaks controversy. But it quickly backfired. Not everyone agreed Wikileaks was engaging in illegal activity, and many hackers and other idealists not only boycotted PayPal, they hit the company with denial of services attacks.
In a web conference in Paris, a PayPal executive was booed by the audience when he tried to explain why it shut down Wikileaks’ account. It later emerged that all it took was a letter from the State Department claiming Wikileaks was illegal. The PayPal executive, VP of Platform Osama Bedier, told the audience, “One of the signs that you’re a successful payments company is that hackers start to target you, this case isn’t anything different.”
That may be true as far as it goes, which isn’t very far. Again, web companies thrive when idealism and profits are in harmony, not when they are opposed. PayPal miscalculated how strongly many of its customers feel about the issue, and caving in under pressure that was no weightier than a letter doesn’t look very good.