Visa Inc. must face claims that it profited from child pornography by processing payments for the parent company of Pornhub, a decision that Visa says raises questions about the liability payments firms could shoulder as they handle billions of transactions.
US District Judge Cormac Carney in California denied parts of Visa’s motion to be dismissed from claims brought by a woman who is suing both the payments giant and MindGeek -- the parent company of Pornhub -- over a sexually explicit video taken of her when she was 13.
“It is simple,” Carney said in his ruling late Friday. “Visa made the decision to continue to recognize MindGeek as a merchant, despite its alleged knowledge that MindGeek monetized child porn. MindGeek made the decision to continue monetizing child porn, and there are enough facts pled to suggest that the latter decision depended on the former.”
Visa said it believes it’s an “improper defendant” in the case.
“Visa condemns sex trafficking, sexual exploitation, and child sexual abuse materials as repugnant to our values and purpose as a company,” the San Francisco-based firm said in an emailed statement. “This pre-trial ruling is disappointing and mischaracterizes Visa’s role and its policies and practices. Visa will not tolerate the use of our network for illegal activity.”
The lawsuit is the latest turn in a long-running controversy between Visa and Pornhub. The payments giant and rival Mastercard Inc. both began reviewing their ties to MindGeek after a New York Times column in December 2020 accused Pornhub of distributing videos depicting child abuse and non-consensual violence.
Immediately after the review, Pornhub announced it had removed 80% of its content.
Mastercard ultimately said it won’t allow its cards to be used on Pornhub, and it later announced that banks will have to ensure that sellers require “clear, unambiguous and documented consent” in adult content. Visa, for its part, reinstated card-acceptance privileges for MindGeek sites other than Pornhub.
Child Victim
At the center of the California case is Serena Fleites, who says her boyfriend posted on Pornhub a sexually explicit video of her he filmed when she was in eighth grade. The video already had 400,000 views by the time Fleites discovered it.
She alerted MindGeek, which then took weeks to remove the video. By then, the video had been downloaded and then uploaded again several times, with one version garnering an additional 2.7 million views, according to the lawsuit.
Fleites, who filed the case along with nearly three dozen other anonymous victims of sex trafficking, said her life spiraled out of control because of the video. She became addicted to heroin and attempted suicide several times.
“Although Serena is now sober, the long-term effects of Pornhub’s wrongdoing continue to this day,” according to the original lawsuit. “The original Pornhub videos of Serena continue to be disseminated through other platforms, including on MindGeek affiliated sites and other pornography sites. Serena remains estranged from certain family members. Throughout various stages of the past five years she was homeless and lived in her car.”
Visa, in its motion to dismiss the claims, said if the lawsuit was allowed to continue it would “upend the financial and payment industries.” The firm said the suit would encourage misdirected litigation since it doesn’t have the ability to investigate the circumstances of each of the billions of transactions it processes every year.
Future litigants could apply this lawsuit’s “reasoning to injuries caused by guns, prescription drugs, tobacco, soda, furs and myriad other products -- all on the theory that a Visa card was used somewhere along the way and that Visa should have somehow stopped conduct by unrelated actors,” Visa said.
Carney disagreed. He said he’s keeping Visa in the case because plaintiffs are alleging that the payments giant continued recognizing MindGeek as a merchant even after it learned the firm’s websites hosted child pornography.
“Visa is not being asked to police ‘the billions of individual transactions it processes each year,’” he said. “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.”
Shares of Visa climbed 0.2% to $212.51 at 1:23 p.m. in New York.
The case is Fleites v. MindGeek SARL, 21-cv-04920, US District Court, Central District of California.
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