Visa and Mastercard will stop working with the advertising arm of MindGeek, the owner of Pornhub, after a court ruling found that Visa could be held liable for illegal content on the user-generated pornography website.
Visa’s decision to cut off MindGeek’s advertising arm TrafficJunky “until further notice” means that brands can no longer use Visa cards to purchase ad slots across the company’s porn sites.
Mastercard said separately it was “directing financial institutions to suspend acceptance of our products at TrafficJunky”.
“New facts from last week’s court ruling made us aware of advertising revenue outside of our view that appears to provide Pornhub with indirect funding. This step will further enforce our December 2020 decision to terminate the use of our products on that site,” it added.
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The announcements from the payment networks on Thursday came after a federal court denied Visa’s request last week to be removed from a lawsuit alleging that MindGeek earned money from illegal videos featuring people under the age of 18 on its user-generated sites by placing advertising next to them.
“In this pretrial decision, the court denied Visa’s motion to be removed from the case on a theory that Visa was complicit in MindGeek’s actions because Visa payment cards were used to pay for advertising on MindGeek sites, among other claims,” Visa chief executive Alfred Kelly said in a statement.
“At this early stage in the case, courts must accept as true all allegations made in a lawsuit — even if they are not accurate or proven,” he added.
Visa said it disagreed “strongly” with the court’s decision to dismiss its argument that alleged injuries suffered by the plaintiff — a woman who said sexual footage of her taken when she was underage was uploaded to Pornhub — depended “entirely on the independent actions of parties other than Visa”.
Further rulings on the case could have long-standing implications for payment networks and their liability over transactions carried out using credit cards.
MindGeek was brought to the brink of collapse in late 2020 after its main site Pornhub was cut off by Mastercard and Visa following an investigation that identified unlawful content on the platform.
Visa had continued working with MindGeek’s paywalled sites, such as Brazzers, and its advertising network.
The decision to cut off Pornhub nevertheless prompted the site to remove all videos from unverified accounts, which made up most of its content. The site has since lost about a third of its traffic, falling to roughly 2.2 billion visits a month, according to Similarweb.
The decisions are the latest blow to MindGeek, which in June unexpectedly lost two top executives following criticism over the company’s business model and rising tensions with its owner, the Austrian investor Bernd Bergmair.
Luxembourg-based MindGeek has towered over the adult industry since the advent of video streaming. Revenues peaked at about $460 million (€449 million) in 2018 and profit margins at times neared 50 per cent.
MindGeek, which has denied allegations of wrongdoing, did not immediately respond to a request for comment.
Copyright The Financial Times Limited 2022
