PayPal Holdings responded to criticism over the publication of a revised user agreement describing a proposal to fine users for disseminating false information by stating that it has no such intentions.

The problem gained attention over the weekend after the company released policy updates that forbade users from using the PayPal service for actions it defined as 'the sending, posting, or publication of any kind of messages, texts, content, or materials' promoting incorrect information. The new Acceptable Use Policy, which will take effect on November 3, is set to take effect on November 3. Each infraction might result in a fine of $2,500 (about Rs. 2,06,000), according to the update.

According to a statement given to Bloomberg News by a PayPal spokesperson, the warning contained 'incorrect information.' 'This language was never intended to be inserted in our policy,' says PayPal. 

The company's shares experienced their worst intraday decrease since July 26 as they dropped as high as 5.3 percent to $85.43 (almost Rs. 7,000). They decreased 4.7 percent to $85.90 (about Rs. 8,000) in New York this morning.

The initial notification infuriated former firm leaders, including David Marcus, who presided over PayPal from 2012 to 2014. On Twitter, Marcus called the move 'insanity.' The platform's co-founder and Tesla CEO Elon Musk expressed his support for Marcus.

Conservative viewpoints have long been ostracised by right-wing politicians in the US, with social media juggernauts like Twitter and Meta Platforms drawing the greatest criticism. Musk, who is seeking to buy Twitter for $44 billion (about Rs. 3,62,500 crore), has said that free speech will be prioritised on the network after criticising its treatment of individuals like artist Kanye West and former President Donald J. Trump. 

Progressives have supported Republican calls for greater regulation of big tech, but current ideas requiring platforms to protect user privacy and security have mainly failed as Congress prioritises other issues.

Conservative politicians and social media figures also leapt on the PayPal controversy, urging people to terminate their PayPal accounts. Prior to the company's statement, Tim Scott, a Republican senator from South Carolina, indicated that his office would investigate the policy's legality and take whatever necessary steps to put an end to such 'corporate activism.'