It has been a month since Netflix, Inc. (NASDAQ: NFLX) began trying to track down and block users who rely on Virtual Private Networks (VPN) to access the company’s movies and TV series lists, fooling its regional restrictions. Along with Paypal, the task has not been easy, and now, both companies seem to be playing an endless game.
A VPN is a network technology that creates a secure network connection across a public network such as the Internet. It allows users to send and receive data across public networks as if their computers were directly connected to them, benefiting from its functionality, security and management policies.
This is the kind of technology that creates a fake IP address as if it were yours. It would change your actual location and fool, for example, the Netflix system to make it think you are located in the US and allow you access unrestricted content.
To make matters worse, there are some VPN services that specifically advertise they can help users get around Netflix’s geo-barriers. Netflix then announced it will crack down people who use VPNs to view restricted content that is only available in the US because of copyright. However, they are looking forward to expand to 130 countries.
After Netflix begin wanting to eliminate VPN users, PayPal announced that it will stop processing payments to VPN services. Suddenly, last week, Paypal decided they no longer wanted to do business with a Canadian company named UnoTelly, which is a geolocation software, a VPN service that provides users with fake IP addresses. The excuse Paypal gave for this action was because of all the illegal activities they were conducting.
“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,” PayPal stated.
Despite Netflix and PayPal’s attempts to crack down VPN users, after a month nothing has significantly changed. All VPN services continue to operate normally and customers are still watching Netflix through them. UnoTelly simply stopped using Paypal as a payment option, and instead told their customers to pay with credit card.
It is unknown whether PayPal and Netflix are actually working together on this matter, but what is certain is that these actions might cause both companies to lose customers and money.