Billionaire hedge fund manager Bill Ackman claimed Tuesday that Visa continues to process payments for Pornhub’s parent company, despite reportedly knowing it’s “littered” with child pornography and holding the power to shut it down within hours.
Ackman, the CEO of Pershing Square Capital Management, appeared on CNBC’s Squawk Box to throw his support behind a lawsuit alleging that Visa has helped Pornhub’s parent company, MindGeek, profit from child sexual abuse.
“There have been hearings in Canada, around the world—people doing their best to shut down these companies. And the ultimate regulator is actually Visa,” Ackman said. “Visa tomorrow could shut down MindGeek.”
The latest development in the lawsuit against Visa happened Friday when a federal judge in California dismissed the payment provider’s motion to be removed from the ongoing lawsuit. A woman sued Visa and MindGeek for making revenue off sexually explicit videos taken when she was a minor and disseminated on Pornhub and the parent company’s other sites. According to the lawsuit, MindGeek delayed taking down an explicit video posted when the woman was only 13 and required her to submit photographic evidence proving that she was the same child depicted.
“It is simple,” U.S. District Judge Cormac Carney ruled 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.”
Referencing the judge’s ruling, Ackman said he believes Visa has continued to act in a way that threatens its brand integrity and should be forced to pay a “very, very large” amount in the case.
“Despite being entirely aware that there’s child pornography on these sites—it’s littered with child pornography—they continue to provide payment services,” he told CNBC. That is until late 2020 when Nicholas Kristof revealed in a New York Times column the high prevalence of child rape and trafficking videos on Pornhub. Essential to spreading those videos are the platforms through which the site receives ad revenue: Mastercard and Visa, Kristof reported.
In reaction to that article, both Mastercard and Visa said they would stop processing payments on Pornhub, Reuters reported in December 2020. “They shut down the sites overnight which would have bankrupted them,” Ackman said Tuesday. “Within a matter of weeks, they re-authorized the merchants and started accepting payments again, and the crime continues.”
Visa told Fortune Tuesday that its suspension of payment acceptance privileges is still in place for Pornhub and other MindGeek platforms that host and share user-generated content. The same day, some outlets, including Bloomberg, reported that Visa has reinstated acceptance privileges for some MindGeek sites other than Pornhub.
“Visa condemns sex trafficking, sexual exploitation, and child sexual abuse materials as repugnant to our values and purpose as a company,” a Visa spokesperson said. “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. We continue to believe that Visa is an improper defendant in this case.”
MindGeek affirmed to Fortune that it has “zero tolerance for the posting of illegal content” on any of its platforms. The company pointed to several of what it referred to as the “most comprehensive safeguards in user-generated platform history,” including digital fingerprinting videos on its services that violate MindGeek policies around child sexual abuse or nonconsensual acts “to help protect against removed videos being reposted.”
A MindGeek spokesperson said, “At this point in the case, the court has not yet ruled on the veracity of the allegations, and is required to assume all of the plaintiff’s allegations are true and accurate. When the court can actually consider the facts, we are confident the plaintiff’s claims will be dismissed for lack of merit.”
“Any insinuation that MindGeek does not take the elimination of illegal material seriously is categorically false,” the company added.
Ackman said he hopes offering his financial support can send the case to trial, seeing himself as a “fierce, well-financed advocate that will not be forced to settle the case.” He offered to “philanthropically” help finance lawsuits against Visa, per CNBC. But his interest comes from having four daughters, not any economic ties to Visa, Mastercard, or other payment companies. He added that he’s been in contact with Michael Bowe, the lead attorney representing the woman in the case.
“I have no economic stake but believe that this is one of the most egregious corporate governance failures I have witnessed, resulting in enormous harm to so many,” Ackman tweeted Monday. “Seeing that this is rectified and the victims recompensed for the harm they have endured has inspired my involvement.”
This story was originally featured on Fortune.com
Source: https://finance.yahoo.com/news/bill-ackman-says-visa-tomorrow-225400319.html