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Why MindGeek Was Hard To Leave Because Of Visa And Mastercard

To understand how one of the world's most famous credit card brands ended up in court with one of the notorious porn providers, we need some background is.

Article Author:

Martin Patriquin,  The Logic
Why MindGeek was tough to quit for Visa and Mastercard.
Why it was hard to leave MindGeek because of Visa and Mastercard. Associates Press

Recent Judgment of U.S. District Court Judge Cormac Carney 39} With regards to MindGeek, its rigor is such that one cannot help but wonder what a Montreal-founded, Luxembourg-based company actually does. Severity is a prophecy-breakeras opposed to what it is intended to be. As MindGeek has long professed, it's not just his successful IT company. Not just the owners of some of the most famous porn sites in the world.

For Carney, a nearly two-decade veteran of the U.S. federal court system, MindGeek is nothing more than a "known criminal entity" involved in a case. not. A "sex trafficking venture" that distributes, promotes, and monetizes child pornography on a variety of sites, including many of Pornhub. And his Visa, a credit card giant, played a key role in MindGeek's ability to do so, he writes Carney. In a typical biting line, Carney writes, "Visa."

To understand how one of the world's most famous brands appeared in court alongside one of his more notorious porn providers, it takes a little background is required. In December 2020, Serena Fleites was the subject of The Children of Pornhub. She saysShe recounts the darkness in her 4,000-word New York Times column. One facet of the site that has long been marketed as a sex-positive, zeitgeist online haven under the guise of mainstream pretense,has gone from things like craft toAttracting ad spend. Heinz and Unilever.

Fleites had sexually explicit videos of her when she was 14 posted on the site by her then-boyfriend. rice field. It took several weeks for the site administrator to remove the video. With hundreds of thousands of views by then and re-uploads by other users, the Fleites fell into a spiral of drugs and homelessness. she tried to commit suicide. Another batch of videos of her, filmed by the man who introduced her to heroin, then leaked to the MindGeek property. 

In July 2021, Fleites and her 33 Jane Doe plaintiffs filed90} sued MindGeek and Visa. Because you posted the video. The latter, as they provided a payment service for the advertisements that appear alongside these videos. Visa sought to dismiss the lawsuit the following October. Carney's decision denied some of Visa's allegations, effectively keeping the matter to the case.

But perhaps a more pertinent question is why? Why Visa, With A $446.9 Billion Market Cap And His Nearly 65-Year Good Company Reputation, Continues To Deal With MindGeek Despite Potential Gotchas And Countless Warning Flags Is not it. 

The answer, of course, is money. That his MindGeek makes a lot of money — his EBITDA in 2020 was US$187.5 million,, {105 according to the pitch deck I saw last year } — I'm sure you drew your partner with pleasure. Overlook business dangers. MindGeek-owned advertising portal TrafficJunky drives 150 million daily visitors and 4.6 billion daily impressions on his MindGeek site. Proud. It's a lot of monetizable centerpieces. 

But another factor makes these eyeballs even more valuable to credit card companies. MindGeek trades in porn, one of the so-called “high-risk industries,” where credit card companies charge significantly higher merchant fees, ostensibly to offset the increased risk of fraud and chargebacks. can be billed. Similar to industries such as e-cigarettes, debt collection and gambling, it costs more for porn vendors to take money from their customers.

"We're talking an order of magnitude," said a principal at Althing Consulting, a B.C.-based cannabis industry consulting firm. , Ian Dawkins told me. “As soon as it becomes a ‘risky transaction,’ credit card companies can justify all sorts of things: flatter transaction fees, higher percentages, 60-day payment terms instead of 30. Whatever you want to do as a financial company, I can justify it.

The cannabis industry is profitable in this regard.At the beginning of legalization in 2018, marijuana Merchants found themselves paying exorbitant credit card fees, largely because of the perceived risk of peddling marijuana, said executive director of the Retail Cannabis Council British Columbia, Jaclynn Pehota, who is also an Althing consultant, recalls that these rates have since declined as the weight of government regulation helped the industry “de-risk”. The same cannot be said for trading stocks on MindGeek. "Porn is much less regulated than cannabis," Pejota told me.

Needless to say, Visa and Mastercard weren't completely cut off from MindGeek's revenue stream after New York Times. piece. Yes, both have stopped providing payment services to Pornhub. However, they both continued to serve TrafficJunky — as I learned last February that portals were It allowed ad campaigns to target search terms, but various translations of the words "not18", "momdaughter", and "rape".

At the time, I asked his two major credit card companies about the matter. Elizabeth Scofield, Visa's then-Director of Global Brand Protection, did not respond to my email. Mastercard's senior vice president, Seth Eisen, said the company would consider it. In both cases, the status quo has been maintained, at least until now. 

Two weeks ago, when Carney's ruling circulated around the web, I reached out to both companies again, this time on his MindGeek I asked how much they charged me. payment service. Visa didn't respond again, but Eisen tried to keep his Mastercard away from his MindGeek and its advertising platform. “We have no contractual relationship with TrafficJunky. All fees charged to TrafficJunky would have been borne by the acquirer,” he said in an email, referring to the bank that connects MindGeek to his Mastercard network. did.

It takes the power of the courts to really change things, Flight attorney Michael Bowe told me. “Our goal in the MindGeek-Visa lawsuit was to prove the legitimacy of our client, but it was also about transforming the industry. There will be standards," he said. 

Indeed, Judge Carney said that Visa was potentially undertaking an advertising campaign centered around rape and sexual exploitation of minors. I'm paying attention to that. Six days after Carney's decision, he announced that Visa would end support for TrafficJunky. Mastercard followed suit on the same day. 

Six days later, based in Prague, he was a WGCZ ad portal, MindGeek rival, and porn site XVideos and XNXX.With 200 million daily visitors, Traffic Factory continues to accept Visa and Mastercard at

Martin Patriquin is the Quebec correspondent for The Logic. He joined in 2019 after ten years as McLean's Quebec bureau chief. A National Magazine Award and SABEW laureate, he has published inThe New York Times, The Guardian, Walrus, Vice, BuzzFeed and The Globe and Mailsuch as . He is also a panelist on CBC's Power & Politics. @MartinPatriquin

This section was sponsored by The Logic. The Logic is Canada's preeminent technology and business newsroom. For more information seethelogic. see co.

  1. Pornhub, TikTok, Twitter and Facebook would become targets of online-harms legislation proposed by the Liberal government that creates a new category defined as “online communication service providers”.

    Mastercard, Visa, and Pornhub owner MindGeek cease ties with advertising department

  2. The Pornhub website is shown on a computer screen in Toronto in December, 2020. Pornhub says it has removed all content uploaded by non-verified users. The sex website faced accusations it hosted illegal content. The company, which is owned by Montreal-based MindGeek, says it has suspended all previously uploaded content that was not created by one of its content partners or members of its Model Program.

    MindGeek's Secret World: The Montreal-Based Company Behind Pornhub and RedTube

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