EBay Says PayPal Didn't Violate Law - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

EBay Says PayPal Didn't Violate Law

The online auctioneer says PayPal acted in good faith in the way it calculated earnings from online gambling activities.

WASHINGTON (AP) - EBay Inc. said Monday that a U.S. Attorney is claiming the company's PayPal operation violated a part of the USA Patriot Act which deals with transmission of funds connected to criminal activity, according to its annual report filed with the Securities and Exchange Commission.

As a result, PayPal might have to forfeit the amounts it received in connection with such activities, and it also might be subject to criminal liability, the filing said.

EBay said Monday the U.S. Attorney's Office for the Eastern District of Missouri offered a complete settlement of all possible claims and charges covering a purported amount of earnings plus interest that PayPal derived from online gambling merchants from October 26, 2001, to July 31, 2002. The filing didn't provide information on the amount of earnings claimed in the letter.

EBay, which is based in San Jose, Calif., said PayPal acted in good faith and believes that it didn't violate the USA Patriot Act. The company said PayPal calculated that the amount of its earnings from online gaming activities was less than what was asserted in the U.S. Attorney's letter.

In October, Internet auctioneer EBay completed its $1.4 billion acquisition of PayPal Inc., giving it control of a top player in the Internet-payments market.

EBay said it would be harmed by negative publicity, costs of litigation and the diversion of management time if the investigation were to lead to a civil or criminal charge.

The company also said any finding of a civil or criminal violation, or potentially any settlement, could hurt PayPal's ability to obtain, maintain or renew money transmitter licenses in jurisdictions where such licenses are required, which would materially harm eBay's business.

Beginning in July 2002, PayPal provided documents and information related to its services to online gambling merchants, in response to a federal grand jury subpoena issued at the request of the U.S. Attorney for the Eastern District of Missouri.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll