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Shopify chief executive Tobias Lutke photographed at the company’s offices in Waterloo, Ont., in October, 2015. The rising e-commerce company is the latest firm to be caught in the political turmouHannah Yoon/The Canadian Press

The extreme polarization of American politics has landed one of Canada's hottest technology firms at the heart of an awkward controversy.

Ottawa's Shopify Inc. provides e-commerce software for 325,000 merchants on its platform, including Breitbart News – the alt-right publication formerly chaired by U.S. President Donald Trump's senior counsellor, Stephen Bannon. Breibart is renowned for controversial views that its critics describe as anti-immigrant, sexist and racist, bearing incendiary headlines such as "Birth control makes women unattractive and crazy" and "Hoist it High and Proud: The Confederate Flag Proclaims a Glorious Heritage."

For months, Shopify has faced calls to stop providing commercial services to Breitbart – which sells branded merchandise that underscore some of the provocative editorial views on its website.

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Recent items listed for sale include a $24.95 (U.S.) ball cap with a picture of a moving van that reads "Hate America? We'll Help You relocate" and a T-shirt featuring the words "Get in line" superimposed on a map of the United States, selling for $19.95. A "Border Wall Construction Co." tanktop goes for $19.95, while a belt buckle with the words "Unapologetically American" sells for $25.95.

Shopify's terms of service allow it to remove store content or accounts deemed "unlawful, offensive, threatening, libellous, defamatory, pornographic, obscene or otherwise objectionable." But Shopify refused to drop the Breitbart webstore, saying that would betray its adherence to the value of free speech, and that its policies allow merchants to use Shopify if products are legal in their home jurisdictions, citing its status as a "common carrier." (Shopify hosted online stores last year for U.S. presidential hopefuls including Mr. Trump, Hillary Clinton, Bernie Sanders and Ted Cruz.)

That increased the pressure. A petition signed by more than 23,000 people calls on Shopify to "stop endorsing hate" while some Twitter critics have adopted the hashtag #DeleteShopify. Chief executive officer Tobi Lutke has received more than 10,000 tweets and messages asking him to drop Breitbart as a customer. That includes calls from some staff, which led to a company-wide two-hour town hall last fall to discuss the dilemma.

Dissatisfied by the outcome, some complained to BuzzFeed – the first time employees have anonymously criticized the company externally. That has challenged the company's open culture. This week, Mr. Lutke decided he needed to explain Shopify's "nuanced" position. In a post on Medium, the self-described liberal expressed his personal dislike of Breitbart. He said his company wouldn't allow Shopify ads to run on Breitbart's website and that he'd be "delighted" if Breitbart switched to a rival.

To kick a merchant off the platform, he said, "is to censor ideas and interfere with the free exchange of products at the core of commerce." Doing so would leave Shopify "asserting our own moral code as a superior one," leaving its platform "biased and diminished."

But he also wrote: "Products are a form of speech, and free speech must be fiercely protected, even if we disagree with some of the voices." To kick a merchant off the platform, he said, "is to censor ideas and interfere with the free exchange of products at the core of commerce." Doing so would leave Shopify "asserting our own moral code as a superior one," leaving its platform "biased and diminished."

"I find what's going on in the world right now [with polarized politics] to be exceptionally dangerous," Mr. Lutke said in an interview. "I think a company like Shopify must be near the centre. We can't join these bubbles. Once you do, the entire rest of the planet looks completely illegitimate to you. That's exactly [what] got us to this point. We need to figure out how to co-exist."

Shopify is one of many companies caught in the crossfire of the highly charged U.S. political atmosphere, challenged by social-media critics empowered to sound off publicly in ways that weren't available until recently.

President Trump has called out manufacturers for moving work out of the United States. Last week, Uber Inc. CEO Travis Kalanick succumbed to social-media pressure by stepping down from the President's business advisory council. Fashion retailer Nordstrom Inc. stopped carrying a clothing line from the president's daughter, Ivanka Trump, after facing a customer backlash, although the retailer blamed declining sales of the brand for its decision. Facebook Inc. and Google Inc. have taken steps to limit publication of "fake news" items after being criticized for allowing their proliferation during the U.S. election campaign. Meanwhile, some have called for a boycott of Budweiser beer after parent Anheuser Busch InBev aired a pro-immigration advertisement during the Super Bowl.

Shopify would undoubtedly face a vocal backlash from the right if it were to drop Breitbart, possibly even from Mr. Trump. Mr. Lutke noted Shopify had also faced calls from right-wing critics to drop merchants who sell Gay Pride-themed goods and pro-feminist T-shirts benefitting Planned Parenthood. "The moment we shut someone off we are engaged in censorship. We get to make this choice once."

Some business experts questioned Shopify's free-speech defence. "Censorship in its truest form is something that is imposed by government," said Chris MacDonald, a business-ethics professor at Ryerson University. "It would be hard to make the case that Breitbart is being stifled or having its rights trampled on by having one online platform say, 'Look, we'd rather do business another way.'"

Tina Dacin, director of the Centre of Social Impact with Queen's University's Smith School of Business, criticized Mr. Lutke for "hiding behind the free speech thing" and "trying to appease everybody and not do anything. Companies are known by their values and they need to make choices."

But both acknowledged the difficulties facing CEOs in such polarized times. "Companies are now being pushed to decide" what they stand for, Ms. Dacin said. "The values-neutrality stance is hard to do."

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