Netflix Geo-Blocking Crackdown Hits PayPal Users

The game of cat and mouse between Netflix and those customers trying to sneak into watching content from overseas libraries has taken an interesting turn, with e-payments service PayPal refusing to process payments from at least one virtual private network (VPN) provider.

VPN image via Shutterstock

In a letter reproduced in full by TorrentFreak, PayPal said Canadian company UnoTelly was violating its Acceptable Use Policy regarding "sales/offers" on its website, and that it had "permanently limited" UnoTelly's account as a result.

"Under the PayPal Acceptable Use Policy, PayPal may not be used to send or receive payments for items that infringe or violate any copyright, trademark, right of publicity or privacy, or any other proprietary right under the laws of any jurisdiction," the company wrote.

"This includes transactions for any device or technological measure that descrambles a scrambled work, decrypts an encrypted work or otherwise avoids, bypasses, removes, deactivates or impairs a technological measure without the authority of the copyright owner."

Virtual private networks are a popular way to circumvent Netflix geo-blocking.

PayPal said UnoTelly could not appeal the decision. UnoTelly told TorrentFreak it was disappointed by the decision. It published a blog post apologising to customers for the changed circumstances and asking any customers who had used PayPal to switch to paying for its VPN service with a credit card instead.

Unblock-Us, another popular service for sneaking into overseas video content, also confirmed to Fairfax Media that its customers could no longer make payments via PayPal. VPNs and DNS proxy services are popular with online video streaming customers, particularly in Australia, because they can be used to trick the service into thinking the user resides in another country – for example, the US – so they can then access overseas content.

Thanks to discrepancies in territorial licensing agreements, the US Netflix library has several thousand more titles available than the Australian Netflix library. Some TV and movie fans use the technology to access services that are not available in Australia at all, including US-based streaming services from HBO, Hulu and Amazon, or the BBC's online player.

However PayPal's ruthless decision has some people scratching their heads. A VPN has other, arguably more legitimate, uses, such as providing a secure network for private communications, which may be an indispensable tool for some businesses. It's unclear yet whether PayPal will stop processing payments with all VPN services.

Online payments provider PayPal has picked sides in the fight against geoblocking.

Some have speculated the company will only target VPN and DNS proxy providers that explicitly market themselves as tools to circumvent geo-blocking. UnoTelly is one such service – it's in the name. Fairfax Media contacted several VPN providers about the issue. Of those that responded in time, all said PayPal was continuing to process payments.

A PayPal spokesperson confirmed PayPal had "recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws". "We apologise for any disappointment this may cause our users," the spokesperson said.

While neither PayPal's email nor UnoTelly's blog post specifically mentioned Netflix, the timing is uncanny. Just weeks ago the global streaming service announced a crackdown on customers circumventing its geo-blocks, at the behest of the companies who own the licenses to the content it streams.

Australian users were some of the first to get kicked out of watching overseas content, with Netflix telling them to turn off their proxy services if they wanted to continue watching. However some VPN and DNS proxy providers were quick to find workarounds to the crackdown.

Update: A reader said PayPal has also severed its ties with VPN provider Unblock-Us. Fairfax has sought comment from the provider.

This article originally appeared in Digital Life, The Sydney Morning Herald's home for everything technology. Follow Digital Life on Facebook and Twitter.


Comments

    Unblock-us isn't a VPN provider though. Their service is explicitly for working around region restrictions too.

    But this is clearly Paypal being strongarmed by some media company somewhere.

    Ugh, quit this petty bickering and just sort out global content rights already. We've already proven that most of us prefer paying for content over piracy so just make it easily available!

      UHD blurays. Region free! Will be watching 4k movies before they hit the Cinema In Australia.

        4K Kingsmen! YEEEEEEEAH!!!!!!!!

        My head is literally bursting with excitement, :-P

        Last edited 11/02/16 3:51 pm

    “recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws”
    That's rather broad/vague terminology.
    I'd love to understand which jurisdiction and which lesgislation they are refering to.

    lol Just signed up for a VPN for a year last week.

    Surely this leaves an opening for a new online payments company providing a similar service to Paypal to start picking up the slack?

    My mother emailed PayPal when her payment to unblock us was rejected. They responded that Unblock-Us had closed their account.

    As I said in the other story, my money is on netflix having absolutely nothing to do with this.

    I have renewed 2 VPNs in the last 2 days using PayPal, and didn't have any issues. Using [email protected] is the wrong way to do it and no other VPN provider makes themselves such an easy target to having their account blocked by paypal (except maybe unotelly).

    They are hundreds of VPN providers that accept paypal, and they are all taking payments.

    Don't use unotelly please. It's an overpriced under-developed service and I regret the day I ever gave them money.

    If you want a DNS unblock service there are plenty of Australian companies you can use, such as smarterdns.me and uflix.com.au

    If you want a VPN service, go to a professional VPN provider who keeps no logs - refer to torrentfreak's vpn providers that really take anonymity seriously 2015 edition article.

    I'm not going to debate the legalities and moralities of using a VPN to circumvent Geo Blocking. Whilst I do not use one myself, I do not claim to be a saint so glass houses and all that.

    HOWEVER

    In recent years PayPal has tried to market itself as a financial institution similar in many ways to a bank. TheIr marketing often goes so far as to suggest that they can be a suitable replacement for a bank - and many of the products and services are clearly designed with this in mind.

    How can they possibly hope to reconcile this with the idea that they can decide what I am allowed to buy with my money???

    PayPal: "YOU ARE NOT MY SUPERVISOR!!!"

    Last edited 11/02/16 5:04 pm

      Haha, a replacement to a bank? If I have my bank do a chargeback, they put the money back on my credit card. If PayPal does a chargeback, they put them money in my paypal account and I'm charged a fee for retrieving it.

    Well, hit them where it hurts.

    Nice going Netflix, I'm sure you muscled PayPal into this stupidity. I think I'll just close my Netflix account and use some other option. Two birds with one stone, keep the money in Aus and prove a point about bullying other companies.

    PayPal tread lightly, there are lots of alternatives, we don't need you telling us what we can do with our hard earned money.

    Elon Musk must be hating what they have done with PayPal.

    Several years ago, the ACCC deemed that region locking is against Australian law, it is also against the free trade agreement with the USA.

    If this is the case for DVD's and Blurays. Why is it any different for online content? I would say that we are been strong armed by the MCAA and RIAA, and it is in fact, not legal for them to do what they are doing.

    Here's something interesting...

    http://www.malcolmturnbull.com.au/policy-faqs/online-copyright-infringement-faqs#VPN

    Q: Many Australians use a VPN to access Netflix in the US. Is it illegal for me to use a VPN to access Netflix?

    The Copyright Act does not make it illegal to use a VPN to access overseas content.
    While content providers often have in place international commercial arrangements to protect copyright in different countries or regions, which can result in ‘geoblocking’, circumventing this is not illegal under the Copyright Act.

    As far as I am concerned, what paypal and Netflix are doing is against the Australian consumer laws. Class Action time?

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