Important infos about app.seafile.de and licensing purchases through our web shops

This post contains an important update about our Seafile cloud service on https://app.seafile.de and licensing purchases through our web shops.

Update 2016/06/22

Yes, our PayPal account has been re-instated. PayPal called us this afternoon to apologize for the frustration and inconvenience that restricting our PayPal account has caused us. They said they made a mistake in our case. We are not a “high risk business” and sufficiently explained our business model to them when they asked us.

Theoretically we could accept PayPal payments again. But the whole situation has left a bad after taste. It just felt very wrong when we had to cancel all existing subscriptions last Saturday. We appreciate PayPal for apologizing and being so honest about the fact that they’ve made a mistake. But the whole incident has shattered our trust in PayPal. We just can’t imagine how we should be able to trust PayPal again after what has happened. That’s why we are currently still looking into alternatives.

Since we are no longer allowed to use PayPal as a payment service provider, we will temporarily offer our cloud services for free. As soon as the new ordering system is ready for use with a German payment service provider we will convert these free accounts back to paid accounts. You can find information about the actual cost of the accounts on the order page. Those of you who don’t want to pay for their account after the convertion have the right to terminate their account.

Original Text

From Sunday June 19th 2016 we are no longer allowed to accept payments via PayPal. PayPal has demanded that we monitor data traffic as well as all our customers’ files for illegal content. They have also asked us to provide them with detailed statistics about the files types of our customers sync and share on https://app.seafile.de

Since complying with this demand would violate German / European data protection laws (and also be morally wrong in our opinion) we have declined to comply with this demand.

PayPal has notified us on June 14th that we have time until June 19th to remove PayPal as a payment method and all mentions of PayPal from our web sites.

For this reason we have to terminate all PayPal subscriptions for any purchases on https://shop.seafile.de and https://shop.seafile.com during the course of the day.

Please don’t worry about your data or your cloud account. We will not close any accounts. We will also continue our service on https://app.seafile.de – just without PayPal payments.

We are currently looking into other payment providers and hope to find a solution for the issue as soon as possible. Until we found one, you can keep using your existing cloud account. It’s just not possible to order new ones at the moment.

We apologize for any inconvenience this has caused you.

The backstory

We were first notified about a “violation of the PayPal terms” on June 2nd 2016. PayPal sent us 16 questions to answer about the details of our business plan. These questions seemed to target file sharing or torrent services. We tried to answer them as well as we could and also tried to explain to PayPal that we are not a file sharing or torrent service but offer a file sync and share service similar to Dropbox.

After answering all their questions as well as we could but clearly stating that we do not monitor our customers’ data and that doing so would violate German / European data protection laws we had to wait for two weeks to receive an answer.

PayPal’s answer reached us on June 14th stating to solve the current “conflict” we would have to remove PayPal as a payment method. Now, in our opinion this doesn’t resolve this so called “conflict” at all so we tried once again to speak to PayPal and explain our situation. The PayPal service representative we had on the phone was very surprised about the whole situation and told us that this would likely be some kind of misunderstanding. Since other sync and share services are allowed to offer PayPal, there should be no reason why we should be treated differently.

But on the next day someone from PayPal’s brand risk management team called us to confirm the original decision and said we indeed have to remove PayPal as a payment method until June 19th. That other similar services are allowed to use PayPal doesn’t matter to them. That some of them even use Seafile also doesn’t matter. PayPal makes these types of decisions on a case by case basis and in our case have decided to not allow us to use PayPal any longer. This decision is final and cannot be appealed or cross checked by a second reviewer.

Further Reports

65 comments

  1. Mark says:

    Please start accepting Bitcoin.

    • John says:

      Yep; this is the best use case for bitcoin–legitimate. And you can bet this is not paypal, but rather someone pressuring paypal. Bitcoin is immune from that kind of nonsense to a great degree.

      • John Doe says:

        >>And you can bet this is not paypal, but rather someone pressuring paypal

        That could, indeed, be the case. I used to work for a U.S. money transfer company, and that was the case there. OFAC/Feds looking over their shoulder, deciding which customer was OK, which not. The booted customers were not given reasons, also no possibility to have the decision reversed. It is not a very transparent process. Some of their reasons may be good, some not, we never know.

        Most VPN companies nowadays accept bitcoin.

    • bob says:

      set up bitcoin and we the people, the generation of the digital will support you! fuck paypal!

  2. mkzero says:

    Seems to me that’s a misuse of the pseudo-monopoly… Maybe hint the European Commission on this? Forcing you into unlawful behavior doesn’t seem like something they’d be eager to find out about..

  3. Nate says:

    It is ‘as well as we could’ rather than ‘as good as we could’. I let it pass the first time, but when I saw it a second time I had to say something.

    • Ken Corey says:

      Srsly? A native German speaker, with English of this quality, and you’re quibbling over well/good?

      Language is an interesting thing, used in interesting ways in different places.

      Let me demonstrate:

      Here in the UK, we’d say you’re well stupid, and a right nob.

      See? Fun for everyone.

  4. Jonas says:

    What you’ve done is morally right and PayPal should be ashamed. Lobby interests are pushing them, this is obviously not a proactive idea on PayPal’s behalf. They should be doing what you do, be vocal about these things and inform the world about what’s going on. Thank you for sharing!

  5. […] June 21, 2016NielsIFTTT, reddit Leave a comment Important infos about app.seafile.de and licensing purchases through our web shops […]

  6. Marcelo Lima says:

    Parabens !! Integridade moral é o que falta às empresas nos dias de hoje. Se alguém comete um ilicito, será pego pela força da lei, não porque há câmeras que vigiam os recintos privados do usuário.

  7. Daniel says:

    It’s extremely rare to see a tech company taking an ethical standpoint on an issue like this instead of going for short-term profit. Needless to say, as long as you maintain this standpoint and this level of transparancy, you’ll have a lifetime customer in me (as well as a vocal supporter). I hope you’re able to find a new payment provider soon. Can’t wait to support your services again!

  8. Jozef says:

    How about Bitcoin? I already use it to pay for VPN and other cloud services, so why not here?

  9. An affected merchant says:

    PayPal did the same to us. We had to remove certain products at short notice, products that all our competitors are still permitted to sell, accepting PayPal.

    We lost several MILLION dollars as a consequence. We have our own PayPal account manager and she told us that PayPal won’t comment on the issue. We showed PayPal’s executive office all the stores that accept paypal for the same products. PayPal said that they have read our comments but that they won’t reconsider.

  10. […] a post on its website the Germany company, which provides a similar service to Dropbox, said it would temporarily offer […]

  11. Roark says:

    You should know your data a bit. Seems irresponsible to offer hosting and not know if files are copyright protected or illegal content. What privacy law blocks you from knowing if files are child porn or illegally downloaded movies?

    • gerlach says:

      The laws clearly state that UGC sites (storage) are too remain content neutral. Privacy laws are a separate issue. Filtering is not an acceptable method of protecting copyright according to the European Court of Justice. Cloud Services will not be able to operate if the economic impact of monitoring data is placed on the platform. The platforms should respond timely to takedown notices. Anything more rigorous sets a dangerous precedent and stifles innovation.

    • noa shiruba says:

      They should absolutely not know their data, for multiple reasons. The copyright issue is a red herring to begin with. Even a word file you write yourself is technically copyrighted under us law as soon as you save it, it’s just not registered. What’s more, you are perfectly within your right to back up or sync your copyrighted files. For example, I have mp3 files I purchased from Amazon, and I sync them between my machines – there is nothing against any rules here.

      What’s more, knowing the content could be dangerous from a legal point of view, since they may then be obligated to police their users. Only storing encrypted data is by far the smartest option, for multiple reasons, including over zealous law enforcement, hackers, and curious employees.

  12. gerlach says:

    PayPal ceased being a tech company many years ago and acts like a traditional bank that is clueless to developing security & privacy laws.

    • Steve says:

      Paypal acts like a bank, but legally they are not a bank and are immune from many of the legal consumer protections that banks are subject to. It’s a brilliant racket. Sucks for customers though.

      • Nomad says:

        Lol, they tried to be a legit payment processor in Turkey and since they couldn’t meet what’s required, they ceased all business in Turkey.

        Sounds more like they’re getting way too cocky.

  13. Jouni says:

    This kind of company behavior should be notified to some consumer protection or banking regulators in Germany. Let them deal with Paypal, so they make it big enough issue for Paypal to care about European laws.

  14. Marlor says:

    So every German / European Firm accepting Paypal,
    is either violating German / European data protection laws or violating PayPals EULA?

  15. Seth says:

    This is clearly a poor business decision on PayPal’s part. That makes me consider whether it isn’t just them. They are a USA-based business and we’ve seen a lot of news over the past few years about laws and practices of increased surveillance. Perhaps the insidious thing is not that we’re hearing about PayPal in this case, but perhaps all of the quiet cooperation prevalent in the industry. It is reasonable to assume the US Government demands that level of data gathering for all US-based financial processors.

  16. Dominic Rose says:

    isn’t this a mention of PayPal on your website though?

  17. Joseph says:

    This is just like a principal of a high school telling a students dad not to give him pocket money because he spends time with his daughter. The lobbyist and PayPal as well shoulf both be ashamed.

  18. Seafile, a German file-syncing service similar to Dropbox, has announced that Paypal is demanding that they monitor customer data for “illegal” content in violation of German law. | News, Travel, Celebrities, Cusine says:

    […] submitted by /u/porkchop_d_clown to /r/worldnews [link] [comments] read more SHARE Facebook […]

  19. EZ says:

    you should check out paystand — http://www.paystand.com – they also do BTC handling.

  20. User34300 says:

    I will be more than happy to pay out in bitcoin.

  21. Will Bott says:

    I’ve said it before many times for many reasons:

    FUCK PAYPAL.

    Start accepting Bitcoin and you’ll have plenty of customers for a long, long time.

  22. TW says:

    Some retailers are starting to look for other methods of payment for other reasons, such as high fees. Crypto currencies are looking better and better as they become more easily accessible. Bitcoin and DASH are good contenders.
    https://node40.com/2016/06/14/Walmart-Canada-dumps-visa-time-for-dash.html

  23. mig says:

    Similar issue with us. Except that they blocked our account without notice nor explanations. If you (people at seafile.de) have personal accounts at PayPal, you should take your money back quickly, as they also blocked our own accounts 2 weeks later.

    Our story (copy/paste from https://www.downloadhelper.net/donate):

    “””
    Back in early 2007, a few months after we started the DownloadHelper project, we wanted to implement a system to permit donations to the project. We looked around to see what solutions were available to process payments and PayPal was there, so we went for it. Over the years, the system has been working but suffered a number of flaws: multiple bugs in the management interface, lack of reactivity from support. Dozens of times, we talked about moving to an alternative solution. But you know, when you have a system with issues but which roughly does the job and on the other side, enough work to occupy 12 hours of your day, you do what is absolutely necessary. So we remained with PayPal.

    In late October 2014, we received a mail from PayPal saying that “we were in violation of PayPal’s Acceptable Use Policy”, (not mentionning which point of this policy)”, that our account was “limited” and there was no possible appeal to that decision. “Limited” at PayPal means that you cannot receive nor emit any payment, and they keep your money for 6 months. We also discovered that we were not able to contact their support to get details about this decision. We had to use a personal user account to be able to reach someone at PayPal support, and we were told that apparently, DownloadHelper were in violation with some copyright laws and there was no way to know which ones exactly.

    Maybe the guy at PayPal who took the decision was overbusy or too lazzy to make a proper due diligence to see what service DownloadHelper was actually providing (remember that if DownloadHelper breaks any copyright law, pressing PrintScreen also does, so you’d better remove that key off your keyboard). The point was that the decision was made without asking information nor giving us chance to explain our case. No appeal.

    If making a wrong decision in a big company is common and happens every day, suspending a partner business without warning nor explanation is highly unprofessional. But somehow, very consistent with PayPal’s attitude we could see over the years.

    Even worse: a couple of weeks after they suspended our business account, they also closed developers personal PayPal accounts, because there were “linked to one or more accounts not respecting PayPal’s policy”. So now, in many cases, we don’t have a way to donate to the web projects we like since they often implement a single way to make payments, over PayPal. Well, we can’t blame them, we have made the same mistake for years.

    So, if you plan to do business online, think twice before considering PayPal. Keep in mind they can close your account without notice nor explanation. And if you still go with PayPal, never, ever, keep a significant amount of money on your account: they will block it when they will close your account.
    “””

  24. Chris says:

    “PayPal has notified us […] to remove […] all mentions of PayPal from our web sites.”
    Does this also include this blogpost?

  25. […] GmbH informed its customers on Saturday that they would no longer be able to pay for the service using PayPal—the only […]

  26. Solio says:

    Adopt Bitcoin!
    Much easier & cheaper than Paypal, less Fees to pay and the community would support the decision.

    I believe Bitpay offer excellent merchant solutions.

  27. […] GmbH informed its customers on Saturday that they would no longer be able to pay for the service using PayPal–the only […]

  28. John Doe says:

    Wow kudos to your team for sticking up for your users. I never even heard of you till now. This is BAD PR FOR PAYPAL! Shame on them for over reaching their limits. They are most likely being influenced by an outsider to target services like yours.

  29. Clem says:

    Stupid PayPal policy actually promoting adoption of Bitcoin. Great.

  30. PayPal Dumped Cloud Company After It Refused To Monitor Customers' Files - Fortune - Anerst says:

    […] GmbH informed its customers on Saturday that they would no longer be able to pay for the service using PayPal—the only […]

  31. Iron says:

    It would be great if you can accept bitcoin. If you’re worried about implementation and currency exchange risk, check a service called Bitpay, they allow you to accept bitcoins for the assured exchange rate: client pays in BTC, bitpay will covert it to tradinal currency and you always receive a fixed amount in $$/EUR. Their fees are small, it’s no brainer really :D. Having said that, not everyone uses bitcoin, so you might also need to have a credit card option – something for everyone :).

  32. […] Important infos about app.seafile.de and licensing purchases through our web shops – Seafile […]

  33. Michael L says:

    This doesn’t make sense. Doesn’t this mean you could report PayPal to the EU for violating data protection laws? They would seriously change their tune if it was going to affect their financials in the EU..

  34. Jeroen M. says:

    Bitcoin?

  35. […] немецкого облачного хостинга Seafile.de опубликовали заявление о прекращении приёма платежей через систему PayPal. В […]

  36. Bernie says:

    My congratulations to this clear decision!

  37. Emmy says:

    I think I just found my new cloud hosting company (via slashdot). Let me know when you are up and accepting new customers.

  38. Emmy says:

    I think I just found my new cloud hosting company (via slashdot). Let me know when you are up and accepting new customers.

  39. Emmy says:

    I think I just found my new cloud hosting company (via slashdot). Let me know when you are up and accepting new customers.

  40. […] user behavior or risk being cut off from the payment network. As a result, the Seafile project decided to drop PayPal due to their invasive […]

  41. PayPal eist dat Seafile opgeslagen data van zijn gebruikers controleert – PChulp-Noord says:

    […] dat de eis van PayPal ingaat tegen Europese regelgeving. In een blog op de eigen Seafile.de-site zegt het bedrijf contact te hebben opgenomen met PayPal en dat daar in eerste instantie verbaasd […]

  42. […] user behavior or risk being cut off from the payment network. As a result, the Seafile project decided to drop PayPal due to their invasive […]

  43. Seafile Drops PayPal After Refusing to Spy On Users - BitcoinEZ says:

    […] user behavior or risk being cut off from the payment network. As a result, the Seafile project decided to drop PayPal due to their invasive […]

  44. Silja says:

    Yes, our PayPal account has been re-instated. PayPal called us this afternoon to apologize for the frustration and inconvenience that restricting our PayPal account has caused us. They said they made a mistake in our case. We are not a “high risk business” and sufficiently explained our business model to them when they asked us.

    Theoretically we could accept PayPal payments again. But the whole situation has left a bad after taste. It just felt very wrong when we had to cancel all existing subscriptions last Saturday. We appreciate PayPal for apologizing and being so honest about the fact that they’ve made a mistake. But the whole incident has shattered our trust in PayPal. We just can’t imagine how we should be able to trust PayPal again after what has happened. That’s why we are currently still looking into alternatives.

  45. […] user behavior or risk being cut off from the payment network. As a result, the Seafile project decided to drop PayPal due to their invasive […]

  46. Seafile Drops PayPal After Refusing to Spy On Users | ShoeMoneyMike says:

    […] user behavior or risk being cut off from the payment network. As a result, the Seafile project decided to drop PayPal due to their invasive […]

  47. Gov says:

    user http://www.stripe.com simple payment solution and cheaper transactions fees

  48. […] Seafile announced on June 19 on  that they ceased services with PayPal, explaining: […]

  49. […] Seafile announced on June 19 on  that they ceased services with PayPal, explaining: […]

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