In December, Pornhub captured headlines after it was featured in a New York Times article. The attention made many of us working in and with the adult industry a little nervous. Our merchants and acquiring banks had a lot of questions and wondered what kind of backlash was to follow. Would the entire industry be impacted? How would card brands and this attention affect the adult market and adult content? Would we face bigger challenges?
When the spotlight targets a specific business practice, we all face the wrath of new card brand rules. Most of the time, those additions can be challenging to manage. Just look at how past bad behavior changed free trial regulations, lowered chargeback thresholds, tightened merchant location rules and added stricter KYC rules to onboarding merchants. I firmly believe that as an industry, if we follow the card brand and regulatory guidelines and limit our exposure to third-party groups, our industry will be left alone.
Even if you don’t have user-uploaded content yourself, it’s important to conduct a URL analysis on all the websites and affiliates you work with.
Pornhub is a free tube site where consumers or users could upload content. And although they did have controls in place, keeping up with the pace at which the content was uploaded was difficult. Many times, deleted content would be uploaded again by a different user account. Some of the uploaded content may have violated the card brand management policies by associating the card brands with illegal material, including underage content, non-consensual material, copyright violations or having content that didn’t have the participants’ permissions to post.
Why would the card brands care about a free site? Card brand rules make no distinction on the source of the brand-damaging content. If the free site or an affiliate is violating card brand rules and a merchant is monetizing that traffic, the merchant processing the payment will be held accountable. In the case of Pornhub, traffic was monetized through their premium memberships, which processed payments through Visa and MasterCard, thereby directly benefiting from what the card brands considered to be non-compliant material and was therefore considered responsible for the violation.
The main issue is how the user-uploaded content is being reviewed and managed. This month our Segpay compliance team provides some insights and tips on managing user generated content.
New Guidelines on the Horizon
To regain compliance, Pornhub rolled out significant changes to their user-uploaded content focusing on how it was managed as well as removing millions of videos where the users and participants could not be verified. Pornhub is now blocking unverified uploaders from adding new content and eliminating the ability to download most videos.
These Pornhub updates could be the way all tube programs handle content. It is likely that card brands will come out with their own guidelines in the future along with rules around tube sites and uploaded content. Before all that happens, look internally, by checking your own policies and auditing your procedures.
Conduct a Self-Check
If you have user-uploaded content, it is important to do a self-check ASAP. Make sure you have a well-documented content monitoring system in place, so you stay out of trouble. We suggest including the following in your internal self-check:
- Consult a knowledgeable industry attorney. Remember that just because someone else is doing something, it does not mean it is not going to get you into trouble.
- Comply with your legal requirements, such as 18 U.S.C 2257.
- Develop a formal policy to review and validate all users uploading content to your site. Remember, anonymity breeds risk.
- Have a formal statement from the person uploading the content that they can attest that they own the content and have the rights to distribute it. Also, that they have the permission from any persons appearing in the content to distribute it.
- Create a formal policy and procedure for reviewing uploaded files before the files are made available to the public.
- Incorporate both automated and manual review systems.
Make sure the content does not contain any of the following brand violations
- Depictions of persons under the age of 18 at the time of filming
- Forced or non-consensual sexual activity
- Bestiality
- Hate crimes
- Violence or extreme sexual violence
- Mutilation of any person or body part
- Blood
- Counterfeit or copyright-infringing material.
Dive Into URL Analysis and Takedown Notices
Even if you don’t have user-uploaded content yourself, it’s important to conduct a URL analysis on all the websites and affiliates you work with. All referring URLs must be captured and crawled for any violating content. This is a time-consuming, but an important step.
Look for takedown notices violating the Digital Millennium Copyright Act (DMCA). This written, publicly accessible notice gives you eight hours to remove any identified files. Steps must be taken to prevent re-uploading of the same file. Expect acquiring banks to be paying closer attention to these types of programs and violations going forward.
Let’s face it. Uploaded content is not going away. Everyone has a phone and is generating data at mind-blowing rates. According to Statista, YouTubers alone are uploading 500 hours of fresh video to the platform per minute. That adds up to 30,000 hours of new content per hour and 720,000 hours of new content per day. We need to be smart keeping our own sites in compliance as this content comes in. By conducting self-checks and generating your own guidelines, you can avoid finding yourself in the hot seat.
Cathy Beardsley is president and CEO of Segpay, a global leader in merchant services offering a wide range of custom financial solutions including payment facilitator, direct merchant accounts and secure gateway services. Under her direction, Segpay has become one of four companies approved by Visa to operate as a high-risk internet payment services provider. Segpay offers secure turnkey solutions to accept online payments, with a guarantee that funds are always safe and protected with its proprietary Fraud Mitigation System and customer service and support. For any questions or help, contact sales@segpay.com or compliance@segpay.com.
