Smashwords vs PayPal

From Fast Company, an interview with Mark Coker, CEO of Smashwords.

Smashwords is an independent e-book publisher, popular with authors that don’t have mainstream contracts.  Basically, anyone can write a book, upload it to Smashwords, who will then distribute it.  Most of the revenue goes back to the author.  Great model for aspiring authors.

This is a very odd conflict, in that PayPal, at the prompting of credit card companies, threatened Smashwords with canceling their PayPal service if they did not remove titles that were considered “smutty.”  The reason I find this odd because I wonder if credit card companies have the same problem with online pornography.  Also, I’m not quite sure how the title of the book is attached to the credit card companies – if I buy something at a store, it’s usually the store’s name that I see on the  credit card statement.  Very odd situation, but glad Smashwords prevailed.

Regardless on your position on erotica, this is one of those slippery slope issues.  Once you start down it, where is the line drawn?