February 11, 2016 4:17 pm
Updated: February 12, 2016 8:34 am

PayPal cuts off service to Canadian VPN provider thanks to Netflix crackdown

Netflix has gained an unlikely ally in its fight against VPNs.

(AP Photo/Elise Amendola, File)
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UPDATE (Feb. 12): In a statement to Global News, a PayPal spokesperson said the company has recently discontinued service to businesses that “actively promote” their services as a way to get around copyright restrictions.

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“PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights. This policy extends to services that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners,” a spokesperson said.

“In line with this policy, PayPal has recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws. We apologize for any disappointment this may cause our users.”

UnoTelly does not appear to advertise its service as a way to watch U.S. Netflix; however, the company does retweet users who credit the company for letting them gain access to the American version.

unotelly-retweets

“PayPal will continue to support VPN providers that are operating legally and not marketing their services for unlawful uses. PayPal does not permit use of our services by VPN providers that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners,” the PayPal spokesperson said.

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Netflix is making good on its promise to crackdown on users who use virtual private networks and proxy services to view out-of-country content on the video streaming service. And now it appears the company has gained an ally in PayPal.

PayPal has cut off payment services to Canadian virtual private network (VPN) company UnoTelly, stating that the company’s services are against PayPal’s policies because they help users get around copyright restrictions, according to torrenting news site TorrentFreak.

Many Canadians use VPN services to stream Netflix movies and TV shows available in the United States, which has more Hollywood blockbusters and recent seasons of popular network shows than the Canadian version.

VPNs are used legally by many individuals and companies to keep internal data and communications secure by encrypting your computer’s Internet connection.

The services also allow users to change their geographical location – so even if you are location in Toronto, you can pretend you are in Los Angeles to access U.S. Netflix.

READ MORE: Could Canadians who watch the U.S. version of Netflix face new rules?

But problems arise when people use VPNs to hide illegal activity like copyright infringement.

In an email to Global News UnoTelly confirmed that PayPal has stopped processing payments for its customers – a move that CEO Nicholas Lin says came with no warning.

“The decision by PayPal has been extremely disruptive to us and our users as there was no prior warning,” Lin said in an email.

“Whether if it is fair or not, the consumer and public will be the best judge. The sentiment on social media and comment section of various media coverage is a good reflection on how the public feels about this issue.”

According to a statement from PayPal, the company “does not permit the use of its service for transactions that infringe copyrights or other proprietary rights.”

Netflix began cracking down on users accessing content through VPN services in January. According to Engadget, Australian users who were accessing U.S. Netflix through several popular VPN providers began seeing the message, “You seem to be using an unblocker or proxy. Please turn off any of these services and try again.”

But some users argue that the move is unfair to those who use VPN services as a means of privacy, or for work.

© 2016 Shaw Media

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