On Monday, WikiLeaks announced that it will suspend publication while it raises funds and fights a blockade by financial institutions that has been forcing the non-profit into financial instability for nearly a year. After WikiLeaks published U.S. Cable Leaks in late November 2010, a series of financial institutions refused to continue conducting business with the website.

On December 3, 2010, Paypal cut off the account that was directing donations to WikiLeaks, which is dependent on public donations for financing. Several days later, Bank of America, MasterCard, Visa and Western Union followed suit, suspending payments to WikiLeaks. The financial blockade has cost WikiLeaks 95 percent of its revenue and has forced the organization to run off of cash reserves for the past 11 months, according to founder Julian Assange.

WikiLeaks’ suspension in publication comes several months after the website and DataCell, the company that accepts donations on behalf of the website, filed an antitrust complaint with the European Commission against Visa, Mastercard and PayPal. Specifically, the complaint argued that the blockade violated articles of the E.U. Treaty–Article 101, which prevents firms from creating partnerships for the purposes of price fixing, and Article 102, which forbids firms in a dominant position from abusing that position.

WikiLeaks has also indicated that it has initiated pre-litigation action against the financial institutions in Denmark, the United Kingdom, the United States and Belgium. The targeted financial institutions have argued that they suspended transactions with WikiLeaks because the organization had violated their terms of service.

WikiLeaks’ Monday statement argued that allowing financial institutions to boycott whistle-blowing organizations sets a dangerous “undemocratic precedent . . . the implications of which go far beyond WikiLeaks and its work.” Furthermore, in a press conference Monday, Assange noted that the U.S. Cable Leaks that sparked the blockade last year were protected by the First Amendment and that there have been no charges or judgments against WikiLeaks regarding their publication.

American lawmakers and policy officials reacted strongly when WikiLeaks released the U.S. Cables in late 2010. The Justice Department considered indicting Assange under the Espionage Act of 1917 and the FBI investigated WikiLeaks for other possible offenses, including conspiracy and trafficking in stolen property.

On the one hand, Assange raises an important point–that allowing financial institutions to boycott whistle-blowing organizations might threaten the important role those organizations play in society. On the other hand, shouldn’t financial institutions be allowed to refuse service to those who violate their service agreements? Did WikiLeaks really violate its service agreements with these financial institutions or is a disagreement with speech at the heart of the financial boycott?

– Kathleen Meyers

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2 Responses to Financial Blockade Drains WikiLeaks; Publication Suspended

  1. Tracy Hancock says:

    This is a very interesting post. I find myself a little torn over the issue though. While the financial institutions are clearly retaliating against WikiLeaks, it also seems like the institutions should be able to choose with whom they want to do business. They have cited a violation of the terms of service. Do they need such a violation? Can’t they just refuse to do business because they want to do so? Is there a contractual relationship of some sort? I’m unfamiliar with this area of the law, but it seems to me like Visa shouldn’t have to deal with WikiLeaks if they don’t want to do so.

    All of this being said, it’s unfortunate for WikiLeaks that this is happening. WikiLeaks should be commended for taking action against the financial institutions, but it also should’ve realized the risks it was taking.

    Great post Kathleen!

  2. Katie Kuhn says:

    Thought provoking piece, Kathleen. I found it particularly timely, given that Occupy Wallstreet protests have been popping up across the country. It seems Assange and the protestors share a common message – that the unchecked authority of the financial sector is running away with our wallets (and potentially our liberties). It will be interesting to keep an eye on this going forward.

    As a sidenote, the Economist ran a piece today that Assange lost his appeal fighting his extradition to Sweden. Unless he is given further leave to appeal, we can add this to the list of WikiLeaks related litigation that could be making headlines in the coming months.