Getting lucky: How porn sites evade regulation

With less oversight over how porn is made – as production has shifted away from large companies towards a set of smaller content creators – it is easier for sex workers to be exploited, trafficked, or given unsafe working conditions.

Art by Bipasha Chakraborty.

CW: this article contains brief mention of child pornography, exploitation, and sexual assault

The internet has revolutionised porn. Where people used to consume porn like film (by purchasing or renting longer videos made by porn producers), they now consume it like social media (by accessing free content uploaded to porn sites by a range of users). The greatest profit is no longer made by the production companies who make content, but by the companies that own the sites to host it. These changes have increased the accessibility of porn to the average person, who can now view more diverse content more cheaply, but have also produced a set of unique harms.

With less oversight over how porn is made – as production has shifted away from large companies towards a set of smaller content creators – it is easier for sex workers to be exploited, trafficked, or given unsafe working conditions. Internet porn has increased the piracy of existing material, making it more common for sex workers to go unpaid for their labour. Non-consensual or illegally obtained material, such as child pornography and revenge porn, can also now be disseminated with relative ease. Importantly, sites like Pornhub reap enormous profits from this kind of content because regulatory frameworks haven’t yet adapted to the scale of these new harms.

Legal regulation – who is liable for illegal content?

Porn sites operate much like social media companies, in particular YouTube. MindGeek, the company that owns Pornhub, is a host – they do not produce content, they merely offer the infrastructure for others to upload it. MindGeek makes money primarily from ad revenue; given the enormous amount of traffic Pornhub receives, companies will pay a huge amount of money for ad space on the site, allowing MindGeek to collect revenue. The way laws surrounding social media sites are structured makes the regulation of this business model exceedingly difficult.

Feasibly, MindGeek and other companies could review all the content they host before it is uploaded (indeed, in the early days of online porn, hosts often did this), but there are legal reasons why they don’t. In the US, Section 230 of the Communications Decency Act protects companies from being liable for content hosted on their site – instead, it punishes publishers, those with more control over what kind of content goes up. This gives companies like MindGeek a convenient loophole to avoid monitoring their content. As a host, they don’t have to screen content before it goes up; provided they monitor complaints and take down content once it has been reported, they’ve fulfilled their legal obligation. This way, until an illegal video is reported, MindGeek is allowed to profit from it.

Worse, these rules give companies an active incentive to turn a blind eye to the kind of content posted on their site. If MindGeek screened content before it was uploaded to Pornhub, they would be legally classed as a publisher rather than a host, making them liable for whatever illegal content was uploaded. If any illicit content slipped through the cracks, MindGeek could face legal action. Instead, these companies prefer to play it safe by only screening content retroactively.

Commercial regulation – Visa and MasterCard’s relationship with porn sites

There are some limitations on what can be uploaded to porn sites, but they’re mostly policed commercially. After a New York Times column accused Pornhub of hosting explicit videos of underage and non-consenting participants in late 2020, Visa and MasterCard began to worry about the reputational harms that working with porn sites could pose. To minimise this risk, Visa and MasterCard devised a set of guidelines for content and threatened to halt transactions on any content that didn’t comply. Not wanting to lose the ability to process payments for ads and subscriptions or the confidence of companies who pay for ad space, porn sites were forced to acquiesce. Since then, there are some things you’ll have trouble finding on sites like Pornhub: real blood (including menstrual blood), the presence of animals (including having only one person in a fursuit), terms like “nymph” or “nymphette”, and anything that creates the impression that one party is asleep are all banned under Visa and MasterCard’s guidelines. Of course, these guidelines have not totally prevented the harms of porn sites. Visa and MasterCard can set a code of conduct for what kinds of video they will monetise, but they have not been able to fully stop the use of their cards on the harmful content these sites host.

In August this year, however, Visa and MasterCard cut ties with MindGeek altogether, announcing that they would no longer allow their cards to be used to pay for ads hosted on any of their sites, including Pornhub. This decision followed an announcement by a US federal judge that Visa could be implicated in a lawsuit against MindGeek for profiting off child pornography. The judge stated that Visa had made the decision to recognise MindGeek as a merchant, despite allegedly knowing that Pornhub monetised child pornography.

It is unclear for how long this freeze will continue, or if it will ever be extended to Pornhub’s competitors. Given how profitable working with Pornhub is, it is possible that Visa and MasterCard may return to provide payment infrastructure to the site, perhaps with stronger regulations. Given the current legal pressure they are facing, it is also possible that they may not return at all and will simply continue to profit from Pornhub’s competitors. Alternatively, they may decide to withdraw from porn sites all together

Regardless, there are a few additional problems with this model of regulation.

The first problem is that it relies on the strength of the duopoly of MasterCard and Visa, which is becoming increasingly unstable. Other payment providers with less strict guidelines surrounding the types of transactions they would be willing to approve, meaning porn sites could discard their current payment infrastructure very quickly.

It is only when porn sites have no choice but to use MasterCard and Visa that these companies can police the kind of content porn sites host.

In fact, some porn sites are already turning away from dominant payment providers to profit from more extreme content. A Czech company, WGCZ Holding, has developed its own payment infrastructure, allowing it to evade regulation by Visa and MasterCard on its porn sites. WGCZ Holding’s biggest site, XVideos, is the biggest porn site in the world; known for hosting extreme and degrading porn, beyond that which can be found on sites like Pornhub. Without having to rely on Visa and Mastercard, WGCZ Holding can profit from this kind of porn in ways that other sites can’t.

As new payment infrastructure firms develop to challenge Visa and Mastercard’s duopoly and their ability to exert pressure on the porn industry diminishes, sites like XVideos may become far more common and far more difficult to regulate. There are two factors which will likely speed up this process.

Firstly, pressure on the US government to assist in breaking up this duopoly is mounting. The system is loathed by merchants, who are forced to hand over billions of dollars’ worth of interchange fees to these payment providers every year. These fees are often built into the price of goods, thereby passing it to consumers. Pressure to introduce regulation that would lower these costs by curbing the power of Visa and MasterCard is not being ignored. The proposed Credit Card Competition Act, which would attempt to spur competition and break up the payment infrastructure firms, has bipartisan sponsorship from senior Democrats and Republicans in the Senate. Even if it does not pass, the strength of support for this legislation suggests that some form of regulation to break up the duopoly will pass in the near future.

Secondly, countries with a desire to reorient their economies away from the US have begun to create their own payment infrastructure to challenge Visa and MasterCard. These incentives extend beyond those of companies like WGCZ Holding. Russia, for example, has been building up their own payment infrastructure to reduce reliance on Western companies. Mir, Russia’s dominant payment provider, is slowly being accepted by more retailers. Convenient app-based options from tech firms like Mercado Pago, Tencent, and Grab are also beginning to transform payments in Brazil, China, and Indonesia. As these alternatives continue to develop, they will challenge the power of Visa and MasterCard.

Even if Visa and MasterCard maintain their dominance, the second problem with this sort of commercial regulation of the porn industry is that it relies on these companies’ willingness to enforce it. Currently, payment processors provide strict guidelines to porn sites to minimise the risk of reputational damage that approving controversial transactions poses. There is, however, always the possibility for these incentives to shift. If the ties Visa and MasterCard have recently severed with MindGeek remain that way, or if this freeze is extended to its competitors, they will have forfeited their ability to control the kind of content these sites monetise. The payment processors that porn sites will turn to if Visa and MasterCard stop approving transactions on online porn altogether may have different values: they could be harsher on these sites, or they could decide to abandon the set of rules that currently governs them altogether.  

Alternatively, it’s possible that Visa and MasterCard will renegotiate its relationship with MindGeek and decide that attempting to restrict Pornhub’s content isn’t worthwhile anymore.

If porn accessibility leads to the normalisation of more extreme content, shareholders for payment processors may lose their conviction to regulate which content they will offer their services for, leading to a change in their behaviour.

Where to next?

As is perhaps evident, the future of online porn regulation is unclear. Regulation of the industry depends on many moving parts, and it is difficult to predict precisely how they are likely to operate in the future. There are, however, a few reasons to remain optimistic.

Firstly, there is more available information about the online porn industry than ever before. In the past, it was difficult for consumers to understand the industry behind the content they were watching – the taboo surrounding porn made journalists reticent in their reporting and gave industry professionals an incentive to keep their operations as secretive as possible. Access to information can often be the first step towards demanding meaningful reform. A recent wave of investigative journalism, which has done an enormous amount of important work towards uncovering long guarded industry secrets, should give us a reason to remain hopeful about the future of online porn regulation. 

Secondly, current legal action against porn sites could lay the foundations for regulation. The current lawsuit against MindGeek and Visa is one of the strongest cases against these sites in recent memory, particularly because a payment processor has been implicated. As these kinds of cases become more common, their outcomes could determine the future of online porn, even if only by drawing attention to the failure of current legal systems to offer meaningful protections for sex workers.  

Sites like OnlyFans also offer sex workers more control over their content, and perhaps give an indication of what the future of online porn could look like. Of course, increasing the popularity of these sites would require more people to be willing to pay for porn. Given people have enjoyed years of free, accessible porn online, a shift towards paywalls may be slow.

In the meantime, it’s important, at the very least, to be aware of the content you’re consuming, and to consider how it made its way to your screen.