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Why Visa is being held liable for PornHub’s illegal child porn

A US judge allowed a lawsuit against Visa to proceed noting that it aided MindGeek (PornHub) in child porn by providing its payment services

“Visa lent to MindGeek a much-needed tool—its payment network—with the alleged knowledge that there was a wealth of monetized child porn on MindGeek’s websites,” US judge Cormac Carney remarked while allowing a lawsuit against the payment company to proceed. Visa was named as a participant in the Serena Fleites v. MindGeek et al case with the plaintiff arguing that the company continued to provide its payment processing services to pornography sites owned by Mindgeek including Pornhub despite knowing that these sites indulged in child pornography.

In a statement to Ars Technica, Visa maintained that it is “an improper defendant in this case” and that the “pre-trial ruling is disappointing and mischaracterizes Visa’s role and its policies and practices.” The payment company added that it will not tolerate the use of its network for illegal activities.

Why does this matter? By holding Visa liable, this ruling suggests that companies might not be able to distance themselves from the illegal activities carried out by their clients just because they themselves have not committed the crime. It sends a signal to payment companies, web hosting providers, and other intermediaries to be more careful about whom they cater to. This could, however, pose a significant challenge to these companies because they serve tens of thousands of customers and keeping tabs on the activities of all of the customers is no mean feat.


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A brief background of the lawsuit

What is it about? Plaintiff Serena Fleites was thirteen years old when a sexually explicit video featuring her was made available on Pornhub.com, which is owned and operated by MindGeek. The plaintiff submitted that MindGeek took a long time to remove the video once it was brought to their notice, and notwithstanding the removal, the video was downloaded by users and re-uploaded several times. MindGeek took the re-uploaded videos and posted them to its multiple pornography websites and earned revenue from advertisements that appeared alongside these videos, the plaintiff submitted. Every time the plaintiff asked for a video to be removed, the company would ask for photographic proof that she is the person in the video, the plaintiff added. The plaintiff is suing MindGeek and Visa, among others, for benefitting financially from the child porn featuring her.

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What is Visa’s role in this: “MindGeek makes money from its free sites in multiple ways: by advertising its paid sites or its products on the free sites, by selling ad space on the free sites for the services or products of third parties, and by harvesting and selling the data of persons who use the free sites,” the order explained. The plaintiff alleges that Visa facilitated this money-making by recognising MindGeek as an authorised merchant and processing payments to its websites despite knowing that these sites contained a substantial amount of child porn and that MindGeek failed to police its sites for such content. “Visa and its agent banks explicitly agreed with MindGeek to continue to process transactions without restrictions on all MindGeek sites provided MindGeek maintained pretextual window dressing claims that it had technology, processes, and policies in place to prevent such content,” the plaintiff submitted. Visa, on the other hand, filed for a motion to have itself removed as a participant because it was not involved in the alleged criminal activities of MindGeek and the other defendants.

Why did the judge allow the lawsuit to proceed?

Visa knew of MindGeek’s child porn problem: The plaintiff alleged that Visa obtained knowledge of MindGeek’s child porn problem from various sources:

  1. Visa performed reviews of MindGeek’s sites pursuant to its own due diligence and compliance functions.
  2. Visa was further put on notice from its “discussions and negotiations about these issues with MindGeek itself.”
  3. In November 2019, Visa’s competitor PayPal terminated its relationship with MindGeek, issuing a public statement that “[PayPal] explicitly prohibits the use of [its] services for the sale of materials that depict criminal behavior.”
  4. Visa also landed on a list maintained by anti-trafficking advocates for processing payments for “pornography websites, including those hosting content fetishizing minors.”
  5. Anti-sex trafficking advocates also sent various letters and emails to Visa detailing MindGeek’s child trafficking venture.

Despite these red flags, Visa did not stop its services to MindGeek until December 2020 when the New York Times (NYT) published a report titled “The Children of Pornhub,” wherein the author explained MindGeek’s child porn problem, the plaintiff stated. Following the NYT report, Visa took temporary action by suspending its business with MindGeek pending investigations into the allegations, the plaintiff submitted.

“If Visa was aware that there was a substantial amount of child porn on MindGeek’s sites, which the Court must accept as true at this stage of the proceedings, then it was aware that it was processing the monetization of child porn, moving money from advertisers to MindGeek for advertisements playing alongside child porn like Plaintiff’s videos.” — Judge Cormac Carney

Visa helped MindGeek fulfil its goal of making money despite knowing about the illegal content:  The plaintiff is suing MindGeek for benefitting financially from the child porn featuring her. “That is where Visa enters the picture in full view, unobscured by the third parties that it attempts to place between itself and Plaintiff. The emotional trauma that Plaintiff suffered flows directly from MindGeek’s monetization of her videos and the steps that MindGeek took to maximize that monetization. If not for its drive to maximize profit, why would MindGeek allow Plaintiff’s first video to be posted despite its title clearly indicating Plaintiff was well below 18 years old? Why would MindGeek stall before removing the video, which Plaintiff alleges had advertisements running alongside it? Why would MindGeek take the video and upload it to its other porn websites? Why, after being alerted by Plaintiff that the video was child porn, would it allow the video to be reuploaded, whereafter advertisements were again featured alongside the reuploaded videos? And why did Plaintiff have to fight for years to have her videos removed from MindGeek’s sites?” the judge asked. “Plaintiff claims that MindGeek did these things for money, and Visa knowingly offered up its payment network so that MindGeek could satisfy that goal,” the judge added.

“After opening the door, Visa was there at the end of the line, too, performing the final act necessary to establish Plaintiff’s section 1591(a)(2) claim against MindGeek: the movement of money.” — Judge Cormac Carney

Visa has significant control over what MindGeek does:  “Visa is also alleged to have far more control over MindGeek than Visa’s motion would suggest. Plaintiff alleges that after the New York Times ran its article exposing MindGeek’s child porn problem, Visa suspended MindGeek’s merchant privileges, which led MindGeek to remove 10 million of its videos, or a staggering 80% of its content,” the judge explained. “Visa quite literally did force MindGeek to operate differently, and markedly so, at least for a time. And the astonishingly strong response from MindGeek—who is otherwise alleged to stonewall and even harass victims—is consistent with Plaintiff’s allegations that unnamed former MindGeek employees have explained that MindGeek constantly worries that Visa could cut it off and makes decisions based on what content the ‘major credit card companies are willing to work with,’” the judge added.

“Here is Visa, standing at and controlling the valve, insisting that it cannot be blamed for the water spill because someone else is wielding the hose.” — Judge Cormac Carney

Plaintiff seeks to hold Visa for a narrower problem, not child pornography:  “The sexual exploitation of minors is an intractable, complicated social problem involving countless independent bad actors. But Plaintiff does not seek to pin society’s problem with the sexual exploitation of minors on Visa, she seeks to hold Visa accountable for a much narrower problem: MindGeek’s monetization of the sexual exploitation of children. Properly framed, the problem at issue becomes less nebulous and involves far fewer actors. That is especially true when one keeps in mind what MindGeek is being sued for in this case: knowingly monetizing (or financially benefitting from) child porn. Again, Visa is not being sued on a theory that Visa encourages the production of child porn by allowing MindGeek to monetize it. Such a theory would not fit the facts of this case. […] Visa is being sued instead for knowingly providing the means through which MindGeek monetizes child porn once such content is already produced and posted,” the judge remarked.

Visa’s “too big to fail” argument is not convincing:  In an argument reminiscent of the “too big to fail” refrain from the financial industry in the 2008 financial crisis, Visa argues that “[i]f accepted, Plaintiff’s theory would upend the financial and payment industries.” The Court does not see this decision as the drastic tectonic shift that Visa fears. […] Visa is not being asked to police ‘the billions of individual transactions it processes each year.’ It is simply being asked to refrain from offering the tool with which a known alleged criminal entity performs its crimes. That is not a tall order and does not spell out an existential threat to the financial industry,” the judge stated. In its motion to dismiss, Visa argued that a decision against the company would upend the financial and payment industries by making it impossible for Visa to process transactions for millions of law-abiding businesses and consumers.

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What does it mean for other companies?

Should FedEx be held liable for delivering packages to MindGeek: The International Center for Law & Economics (ICLE) wanted to submit an amicus brief in support of Visa, but this was denied by the court. ICLE suggested that allowing Visa to be held liable would send a signal that any company that allows MindGeek to “do business”—like FedEx, which delivers packages to the company—is fair game for a lawsuit. The judge took issue with the suggestion and remarked that “Visa is alleged to have knowingly allowed MindGeek to use its payment network to do crime, not simply to ‘do business.’ FedEx can keep delivering packages to MindGeek if it has no reason to believe those packages are instrumental to a crime.”

Should Google be held liable for search results showing MindGeek videos: “Nor would this order support a suit against Google for allowing Pornhub to appear in its search results. Visa allegedly knowingly provided the very tool through which MindGeek committed its alleged crime of financially benefitting from child porn. Even if Google knows that its search engine is being used to drive traffic to a website allegedly teeming with child porn, and thereby indirectly helps that website financially benefit from its illicit content, it would not have provided a tool through which the crime is completed, unlike Visa,” the judge remarked.


This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

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