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No, what it does is make companies refuse to do business with such customers in the first place.

You do anything not mainstream? Sorry, we won't accept your business.

For companies who provide basic functionalities (hosting, payments, etc.) it's just not feasible to check out a potential customer ex ante - they have far too many customers for up-front checks.

"Censorship costs" refer to ex-post checks on customers on which businesses have received complaints or inquiries from Governmental entities.

I work for a payment company and that simply isn't true. We do in-depth checks on every customer. Risk assessment is a major part of our business.

With payment companies, yes. I think ars is talking about Amazon and Paypal, which don't.

They don't now...but they could easily do it in the future. There is no gray area here. What they did was idiotic.

They have no way of identifying which customers are ddosing them :D

The customer ars was referring to was Wikileaks and potential future customers who engage in non-mainstream political/commercial action. The resulting backlash from the Wikileaks affair will encourage the decision makers at Amazon or Paypal to avoid doing business with non-mainstream customers in the future if there is an even insignificant chance that in the future some non-mainstream customer will offend those in power.

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