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Backpage Sues After Credit Card Chokehold

Backpage Sues After Credit Card Chokehold
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Jul 22, 2015 3:17 PM PDT    Text size: 

CHICAGO — Cook County Sheriff Thomas Dart illegally used backdoor methods to pressure credit card companies to stop doing business with Backpage.com, according to a federal lawsuit filed yesterday.

The suit claims the Illinois law enforcer and his department are infringing on millions of users' free speech rights.

"For over six years, Sheriff Dart has pursued a campaign against online classified advertising websites — first Craigslist and then Backpage.com — demanding they shut down portions of their sites for adult-oriented ads posted by users,” the suit said. “At every turn, Sheriff Dart has been stymied by the Constitution, federal law, and court decisions holding that such ads are protected speech and that websites are immune from state-law civil or criminal liability.”

The sheriff shifted his attention to Backpage after he was able to twist the arm of Craigslist, who he initially sought to have declared a public nuisance because it allegedly facilitated prostitution. A federal judge, however, dismissed claims in the suit.

Craigslist later "caved" to Dart's attacks in and removed its "adult services" categories, the complaint said.

"Consistent with Backpage.com's longstanding efforts to preclude improper ads and assist law enforcement, it sought to work with Sheriff Dart's office on screening and security measures, including requiring the use of credit cards for adult ads, which Sheriff Dart requested at the time and Backpage.com has long done. But Backpage.com refused to capitulate to the sheriff's demands for censorship," the suit said.

After Dart's efforts to take legal action failed, he allegedly tried an alternative "out-of-the-box" approach and pressure credit card companies to stop honoring transactions at Backpage.com.

The suit said that Dart’s efforts have been successful because Visa and Mastercard blocked use of their cards for any purchases on the website, while American Express blocked purchases in the adult category.

Backpage said that the sheriff’s actions have "effected an informal extralegal prior restraint of speech without due process.”

“Immediate injunctive relief is critically important in this case,” Backpage said. “Sheriff Dart admits he aims to starve Backpage.com of all revenues and thereby shut down the website. His actions not only infringe and threaten Backpage.com’s rights to publish, but also the rights of the website’s millions of users to speak and receive speech.”

Lawrence Walters of the Walters Law Group told XBIZ that Backpage is on “the front lines of a culture war, with government censors on one side and advocates of online innovation on the other.”

“The government actors think they are doing something to reduce human trafficking by choking off Backpage’s payment providers, but they are misguided,” he said. “Initially, advertising networks like Backpage are not the primary facilitators of human trafficking as some advocates suggest. Social networking sites like facebook.com play a much more significant role in recruiting human trafficking victims, but are not a politically attractive target, like Backpage.”

Moreover, Walters said, eliminating sites like Backpage.com will simply result in less information being made available to law enforcement when investigating human trafficking cases.

“Advertising networks are an important source of information for law enforcement investigations,” Walters said. “Shutting down these sites is just a ‘feel good’ effort, and ultimately harms the efforts to combat human trafficking.

“Backpage is fighting a battle that belongs to all those who cherish free expression and online innovation. Backpage was targeted because the sheriff disliked the erotic speech posted by its users,” he said. “Allowing the government to take these extra-judicial actions such as threatening vendors with investigations unless they terminate services, as part of a coordinated censorship campaign, is incompatible with fundamental First Amendment jurisprudence.

“For many years, the Supreme Court has recognized that similar conduct is unconstitutional. The outcome of this case has the potential to significantly impact online freedom for years to come, and should be watched closely.”

In the suit, Backpage seeks a declaration that Dart's actions are unconstitutional, a reinstatement of credit card services, compensation for lost revenues and punitive damages.

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