Visa and Mastercard sought to distance themselves yesterday from the website Pornhub after a federal judge refused to let Visa walk away from a trial in which the defendant alleges the site’s parent, MindGeek, conspired with the card giant to monetize child pornography.

A woman is suing the MindGeek and Visa in the U.S. District Court for central California, alleging the companies made money from a video in which she appeared naked as an underage victim after videos were posted on Pornhub without her knowledge. 

The July 29 decision by the judge was in response to a pre-trial motion from Visa, the largest U.S. card network company, to be dismissed from the case.

In rare corporate commentary about pending litigation, Visa CEO Al Kelly on Thursday responded on Visa’s website to the widening spotlight on its involvement in the case. He said the San Francisco-based card company would suspend the ability of MindGeek’s advertising arm, called TrafficJunky, to accept its cards until further notice.

That was in addition to Visa’s decision in December 2020 to suspend acceptance of its cards on MindGeek sites, including Pornhub, that post user-generated content.

“Let me be clear: Visa condemns sex trafficking, sexual exploitation, and child sexual abuse,” Kelly said, noting his concern as a father and a grandfather. “It is illegal, and Visa does not permit the use of our network for illegal activity. Our rules explicitly and unequivocally prohibit the use of our products to pay for content that depicts nonconsensual sexual behavior or child sexual abuse.”

Kelly also noted that Visa disagrees with the judge’s decision and suggested the allegations with respect to it are not true. “In our view, our company’s role, policies, and practices have been mischaracterized,” Kelly said in the post. “The allegations in this lawsuit are repugnant and stand in direct contradiction to Visa’s values and purpose.”

The CEO also pointed at Visa’s acquiring bank partners as needing to take responsibility for ensuring that merchants aren’t engaging in illegal activity. “We require Visa’s financial institution clients, which maintain the direct relationships with merchants, to assure and attest to merchants’ compliance with our standards,” the CEO said.

Visa’s reaction comes days after the high-profile billionaire fund manager Bill Ackman excoriated Visa for its role in processing payments for Pornhub. Ackman, who leads New York-based investment firm Pershing Square Capital Management, told CNBC that he doesn’t have any economic stake in the matter. He also said he has offered to fund the litigation against Visa. He alleged Visa continued to work with MindGeek despite having knowledge of its activities and called on Visa as the “ultimate regulator” to take action, according to the CNBC report.

“It is Visa’s policy to follow the law of every country in which we do business,” Kelly’s post said. “We do not make moral judgments on legal purchases made by consumers, and we respect the rightful role of lawmakers to make decisions about what is legal and what is not. Accordingly, Visa can be used only at MindGeek studio sites that feature adult professional actors in legal adult entertainment.”   

The No. 2 card company Mastercard also chimed in Thursday in an online post, saying it, too, had suspended use of its services on 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,” the card company said.

Previously, in December 2020, Mastercard went a step further than Visa in terminating the use of its services on the Pornhub site. “We have zero tolerance for illegal activity on our network,” Mastercard said. “We will continue to follow this case and take further action, as necessary.”

Clarification: This story has been updated to make clear that Visa pointed to its acquiring bank partners as needing to share the responsibility for monitoring merchant activities. 

 

By Lynne Marek on Aug 5, 2022
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