DOJ extracts $30m settlement from PayPal over minority-owned business program
The Department of Justice has reached a settlement with PayPal after targeting the payments platform for a business program aimed at supporting Black- and minority-owned
The Department of Justice has reached a settlement with PayPal after targeting the payments platform for a business program aimed at supporting Black- and minority-owned small businesses. Under the $30 million agreement, PayPal will launch a new Small Business Initiative that doesn't include a whiff of the diversity, equity and inclusion language so despised by the current administration. The program in the DOJ took umbrage with was the Economic Opportunity Fund, which PayPal launched in 2020. The endeavor planned to invest $530 million into Black- and minority-owned businesses, particularly those struggling during the COVID-19 pandemic.
"For far too long, Black people in America have faced deep-seated injustice and systemic economic inequality," PayPal CEO and President Dan Schulman said at the time. "PayPal is uniquely positioned to help in this area, and we are committed to doing our part to address the unacceptable racial divide by advancing a more just economy and society." Rather than continue that work, PayPal will now waive processing fees for $1 billion in transactions for good ol' American small businesses that come with government-approved adjectives. That includes veteran-owned companies and those engaged in farming, manufacturing or technology.
When reached for comment, a PayPal spokesperson told Engadget the company is exited to launch its new initiative: "For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools. We're excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity." We've started to see other settlements reached as the Justice Department bilks money out of organizations that have run DEI programs. For instance, IBM agreed to pay more than $17 million last month to settle the agency's charges that "race, color, national origin, or sex" played a part in its hiring programs.
The offending programs included having "race and sex demographic goals for business units" and using "a diversity modifier that tied bonus compensation to achieving demographic targets." Neither PayPal nor IBM admitted to any wrongdoing. Update, May 12, 6:45PM ET: This story was updated after publish to include comment from PayPal.
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