The adult industry's de facto regulator isn't government, international convention or business itself. It's Mastercard and Visa.
Bill Ackman was at home in the Hamptons, killing time on a Saturday morning in December 2020, when a New York Times article caught his eye. He read it on his phone, got angry, re-read it and logged on to Twitter to express his outrage. Then, the 56-year-old billionaire started plotting the downfall of America's best-known porn site.
Moments like this often trigger Ackman's sibling, Jeanne, to send an email of sisterly guidance: Bill, what on earth are you doing? Why are you weighing in on this topic? You're a hedge fund manager. What makes you an expert? And Ackman usually ploughs ahead anyway. His métier is meddling in other people's business, ideally without an invitation.
Ackman is the founder and CEO of Pershing Square Capital Management, an activist fund that uses its billions to buy stakes in publicly traded companies and goad them into changing their business practices or, at the very least, increasing their stock price.
Before the pandemic, Ackman was best known for a quixotic and bitter campaign against Herbalife, a purveyor of health supplements he accused of being a covert pyramid scheme. (It wasn't entirely successful, and Pershing lost nearly half a billion dollars.) In 2020, he became the talk of Wall Street again with a trade that turned a US$27 million ($43 million) hedge on Covid-19 uncertainty into a US$2.6 billion windfall, all within a month. "I've been called the most persistent person in America," he says. "And I take that as a compliment."
Now Ackman had found a new target in the pages of the Times: Pornhub, the most-visited website of the world's biggest porn company, MindGeek. Nicholas Kristof's column that week included testimony from victims of abusive videos, spy-cams and revenge porn and argued the site was "infested with rape videos", from which it was profiting. (Pornhub denied the allegations, insisting it had better moderation than most social media platforms.)
While Ackman is not against pornography per se, the "appalling accounts of exploitation" just "hit a nerve". "The problem with the topic is people don't want to talk about it," he says, which is why he took a public position with his tweets.
What he did next was more consequential. Ackman texted Ajay Banga, who was then the chief executive of Mastercard, writing "Ajay, please read the above" and sharing Kristof's piece. Ackman wrote that Mastercard was "facilitating sex trafficking" and should immediately stop working with Pornhub. "Call to discuss if you disagree," he concluded, with delicious passive aggression. Not long after Banga replied: "On it."
Ackman knew Banga from the tennis circuit; they share a passion for the sport. He also understood the power Mastercard and Visa wielded over Pornhub's parent company. Most videos on the site are free to watch, but MindGeek offered subscriptions and took credit card payments from small advertisers. Roughly half of the company's overall revenues, which peaked at about US$460 million in 2018, came from paid-for porn.
Within days of Kristof's piece and Ackman's message, the payments giants cut Pornhub off. The effect on MindGeek was debilitating. The company's cash flow dried up. It broke the conditions of its loans, prompting a notice of default from its lenders. And the pressure kept building, as Visa considered making its temporary suspension permanent.
So MindGeek buckled. Almost overnight, the company removed most of the porn available on its flagship site. Pornhub went from hosting 13 million videos to about four million. Millions of videos uploaded by "unverified" providers disappeared. It was probably the biggest takedown of content in internet history.
Mastercard and Visa hardly ever shut out a big merchant. Ackman's text wasn't the main reason they did so in late 2020, but it is not hard to imagine it helped tip the balance. While governments might be slow and bureaucratic, Ackman realised that payment companies, when they want to, can act decisively. "They have to be de facto regulators of what's permissible content and what's not," he says.
What Ackman didn't realise is that Visa and Mastercard have increasingly been doing that job for close to 20 years. The biggest and third-biggest financial companies in the world now exercise more control over the global porn business than any government.
They wield this power in total discomfort and do so by relying on a cadre of satraps responsible for making precise and occasionally bizarre distinctions — what distinguishes a performer dressed as an alien from bestiality, what are the conditions of acceptable vampire sex — that determine exactly what you can and cannot see.
The moving picture has stoked fears of moral depravity from the start. In the 1930s, Hollywood developed and adopted the Hays Code, a regime of self-censorship intended to affirm the industry's rectitude. The provisions — no lustful kissing, no interracial relationships, no sexual perversion, whatever that meant — applied to most major films released for about three decades.
Porn's Hays equivalent isn't maintained by the industry, but by an ecosystem of payments companies, banks, billers and service providers ultimately overseen by Mastercard and Visa. It is a vast domain. Porn accounts for close to 8 per cent of all internet traffic, according to data provider SimilarWeb, and generates 18.5 billion visits a month or a total of 158 billion page views.
As part of a year-long FT investigation into the adult industry, a door to this world was opened to us when a porn executive mentioned, almost in passing, some oddities in production guidelines, the dos and don'ts for making porn. We asked her to dig up a hard copy, and she shared a short document of "best practices" compiled by a Florida-based company called MobiusPay.
It was just a page. But it was packed with unacceptable terms, definitions of extreme content and bans on everything from weapons to depictions of real harm, implied rape or incest. There were also a few puzzling provisions on hypnosis and mind control. Its author is Jonathan Corona, a softly spoken, bespectacled 39-year-old executive. We met in Los Angeles on the margins of Xbiz, a porn-industry conference where performers mixed with fans, payment companies and tech geeks, as delegates nursed hangovers from the previous evening's "lingerie and pyjama" party.
Companies like MobiusPay provide essential services to the adult industry. As one executive put it, "The story of the porn industry is the story of trying to take payments." For a business to charge credit cards, it needs a merchant account from a sponsor in the Visa and Mastercard network. MobiusPay helps sort that out, acting as a bridge between higher-risk businesses — legal cannabis sales, gambling, porn — and credit card companies. That access comes with conditions in the form of content standards.
Corona, MobiusPay's chief operating officer, explained the almost Talmudic way in which these standards are derived. Visa and Mastercard set down rules for the payments community on porn, essentially core principles and goals. Then banks and payment processors like MobiusPay make fine distinctions on what these mean in practice, often with informal help from Visa and Mastercard. The result is lists. Many lists.
Mastercard's core rules take up 436 pages but only devote one paragraph to porn, rule 5.12.7.2, found in the "illegal or brand-damaging transactions" section. It states that the company is against the sale of any image or service that is "patently offensive" or lacks "serious artistic value". It bans nonconsensual sexual behaviour, sexual exploitation of a minor, nonconsensual mutilation of a person or body part and bestiality. Mastercard, it states, is also against "any other material that the Corporation deems unacceptable".
From this ambiguous guidance — not even 10 commandments — people like Corona must flesh out a regime of specific regulation. Since mutilation is off limits, MobiusPay interprets that to mean all blood is prohibited. In a section on "creatures", the company helpfully clarifies that aliens, whenther real or ersatz, are given the same protection as animals when it comes to porn.
For a censor, outright bans are routine; it's nuance that is difficult. Corona read us a sample of "concern words" matter-of-factly, "twink, nymph, nymphet, teen", and explained how these terms are not banned but "tend to create problems", specifically with Visa and Mastercard. The conversation turned to the question of twinks, slang for young, hairless gay men. Presumably working this all out, categorising words and behaviours, must require conversations with Visa and Mastercard? "Absolutely," Corona said. "It's self-censorship and self-policing. Ultimately, if you want to accept Visa and Mastercard, then you have to follow their rules."
Seen in its totality, the system looks very much like an apparatus of control. There are rules. Registration requirements for adult merchants. Enforcement responsibilities, delegated to banks and processors and service providers. See-through powers allow Visa and Mastercard to inspect any site at any time. Penalties, fines and even the threat of being cut off, as MindGeek discovered. There are conferences and seminars and interpretative communiqués. It is a highly regulated market, without any government regulators.
Both Visa and Mastercard declined interview requests. In statements the companies stressed their priorities are supporting legal commerce, even when a transaction is objectionable or morally dubious. The main test is legality. Mastercard explicitly justified its 2020 action against MindGeek on the grounds it had identified "unlawful" content on Pornhub.
Visa and Mastercard play an important role in policing highly regulated, high-risk commerce such as gambling or pharmaceuticals, or other sectors prone to fraud. But when they do intervene, the credit card companies do so carefully and cleave to the law, since their success stems from their ubiquity.
Porn is the exception. Both companies play the role with reluctance but, on a day-to-day basis, they do restrict access to porn that is, strictly speaking, legal. These curbs are justified on the basis that condoning such content, even implicitly, could hurt their brand. Some are clear-cut prohibitions; others are standards that evolve and change with the sexual culture. That means behaviour that might be fine on Netflix may be unacceptable on a porn site taking credit cards.
We asked Corona why his list forbids, for example, depictions of hypnosis and sex while someone appears to be asleep or under the influence of mind control. "Of course they are acting," he said. "But being asleep . . . or hypnotising someone removes the ability to render consent." Which might, in other words, damage Mastercard or Visa.
Jessica Stoya is a career pornographer, model and author. We met in her modest, three-room Brooklyn apartment. Outside the streets were white with fresh snow. Jessica's origins, and the inspiration for her stage name Stoya, are Serbian. She was wearing a baggy top, her black hair pulled back. Fifteen years after being signed as a "contract star" for Digital Playground, a prolific hardcore studio, Stoya, 36, is still recognised on the street while wearing a Covid mask, just from "her eyes and eyebrows".
She is a porn star who has written for The New York Times and Slate and authored a book of essays called Philosophy, Pussycats & Porn. Fans of her live shows would not be surprised by the odd reference to the French intellectual Georges Bataille.
But in these performances, on so-called camsites or paid social media platforms such as OnlyFans, there are some more straightforward things that must go unsaid. Everyday words that cannot be spoken. Phrases that payment companies decide are beyond the pale.
"I'm in lingerie. And people tip me. And I take my bra off or pull the cups down and I jiggle my shoulders while saying, 'T-h-a-n-k-y-o-u,'" she says, making her voice go jittery and giving a brief shimmy. "It's very cute. When I get my period, I have cramps and really don't want to be vigorously jiggling. But I also want people to know, like, don't be disappointed. It would be nice to be able to say — 'It's because I have my period'— but I cannot," she says. "It is a banned word." She cannot type "period" into the chatbox of her porn platform. Stoya says when it comes to porn, Visa and Mastercard have more power than the Pope.
Visa and Mastercard have no explicit rule against blood. But most payment companies and banks in the Visa and Mastercard networks associate blood with violence or mutilation, which is prohibited. So blood is banned, even blood obviously made of ketchup. This is a disaster for vampire porn, which is akin to a forbidden good on the internet. And it puts special constraints on female performers like Stoya. "We're raising people who are becoming sexual in a culture where menstruation is completely erased," she says.
Out of curiosity, about five years ago Stoya contacted CCBill, one of the biggest payment companies specialising in porn. Rather than the "acceptable use" policy on its website, she asked if she could see their full guidance. The detailed list. The one that precisely laid out the limits of what CCBill believed Visa and Mastercard would tolerate.
The four pages of rules shared with her are written in a lawyerly tone and are, in parts, totally bizarre. A section on furries, an online subculture interested in anthropomorphic animal characters with human personalities, reads "content that depicts furries and humans engaged in sexual acts are not permitted across the board. Content that depicts furry engaged in sexual acts with another furry is acceptable across the board." Lest that leave any room for misinterpretation: "Please note, per Visa regulations a furry that contains human-like characteristics is not permitted." So, no half-man, half-furry.
The codification is patchy and inconsistent though. Most tube sites, where free porn is accessible to anyone who clicks on a link, including children, have lighter restrictions than subscription porn or live video platforms, which depend on credit cards and are harder for kids to access. Visa and Mastercard do not want to be seen taking the lead, so payment providers and the porn sites are left to look for subtle signals that a boundary has changed.
"Golden showers", for instance, were long banned from most commercial porn sites. Urinating on others was deemed inappropriate. Then, in 2016, the kink shot to prominence when Donald Trump denied rumours he had taken part in the practice, declaring: "I'm not into golden showers." Before long, the term started to appear on more commercial porn sites, without problems.
In their approach to adult content, credit card company executives see themselves as showing restraint, only going beyond the law in limited cases to maintain basic standards. But for operators in the payments network, it is like guessing the wishes of an all-powerful monarch. You only know you're wrong when you are punished. "Instead of the government defining what is and is not considered sexually acceptable, it is a corporation, a credit card company," says Stoya.
Yet unlike most governments, there is no process of regulation. No consultation. Few public explanations. No names. No sense of who the arbiters of acceptable porn might be. "You know, it is not like I can go down to the Mastercard office and be like: 'Hello, I would like to have a civil dialogue about this.' That's not going to happen," she says. "Who is the arbiter of what can be done with sexual media? I have no idea who they are. Did they take a philosophy class? Do they have a degree in women's studies?"
During the course of making our podcast series, we did meet some of these people. None were philosophers, but there was one sociologist and a few lawyers. Most considered themselves to be payments professionals, managers of risk, facilitators of commerce. Not porn cops. But is that any surprise? Pornography is deeply uncomfortable to talk about, let alone acknowledging its place in our culture or in our lives online. Perhaps it's only to be expected that our porn regulators feel the same.
Written by: Patricia Nilsson and Alex Barker
© Financial Times
