Concerns over VPN users violating copyright laws a concern for both companies.
Netflix customers looking to watch shows and movies not available in their country, can no longer pay for a VPN (virtual private network or virtual private location) connection using PayPal.
The San Jose, Calif.-based, online payment system announced it is cutting payment services to websites that offer VPNs. PayPal said it wanted to prevent people from violating copyright rules and accessing content illegally through a VPN connection.
“As a global payments company, we have to comply with laws set by governments and regulatory agencies,” PayPal said in a statement announcing its action. “PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights.”
VPNs let users access Internet content through an encrypted connection, allowing greater privacy online. However, they also allow Netflix customers to gain access to a larger catalog of out-of-country video streaming by enabling people to change their IP address to appear as if they are in another location.
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Netflix has opposed VPNs because they enable users – and even their paying subscribers – to watch content from another country that isn’t covered in studio licensing deals in their home country. Netflix has been trying to secure content rights globally so customers in different countries can watch same shows but, for now, signs distribution deals on a country-by-country basis.
It’s unclear how many VPNs will be affected by PayPal’s decision. PayPal notified Canadian VPN service UnoTelly that it was cutting ties because of the copyright concerns. UnoTelly responded by advising customers to change their payment to a credit card.
PayPal’s move could have unintended negative results, however. VPN users aren’t necessarily movie lovers hoping to bypass international copyright rules. Many users prefer the additional security and privacy, legitimate concerns for any computer user, afforded by VPNs. PayPal’s decision potentially punishes the innocent as well as the guilty, and that has the potential to create some bad consumer blood.
