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Watchdog launches PayPal inquiry

Online payments giant investigated over changes to its User Agreement to allow transfer of customer information

FRANCE’S data and internet watchdog has launched an inquiry into PayPal after the online payments company unilaterally changed its User Agreement to allow it to give customers’ personal information to third parties.

The Commission Nationale de l'Informatique et des Libertés (Cnil) said that PayPal had changed its conditions on October 18 to come into force on November 18, but left customers who did not agree with the changes no option but to close their account.

Cnil said PayPal’s change allowed it to transfer customer information to anti-fraud agencies and targeted-marketing companies and to increase the amount of information shared with companies such as Facebook.

The change could benefit companies such as Facebook as PayPal is proposing to collect location data (such as users connected to a PayPal Here payment service) and information from its 28,000 commercial users then sell it on.

Now an inquiry has been launched, with Cnil saying that for the meantime PayPal customers should close their account if they do not agree with the change as there is no opt-out clause.

If it finds PayPal has broken French laws then it faces sanctions – although the maximum fine it can impose is €150,000.

Customers are told the PayPal website: “You do not need to do anything to accept the changes as they will automatically come into effect on the above date [November 18]. Should you decide you do not wish to accept them you can notify us before the above date to close your account immediately without incurring any additional charges.”

The full list of changes are given on the PayPal website.

PayPal has five million active accounts in France and 100 million customers in 190 countries. It accounts for 18% of the global e-commerce payments.

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