Visa (V) has temporarily halted card payments for ads across Pornhub and parent company MindGeek following a lawsuit that alleged the payments processor helped the platform monetize on child pornography.
“With respect to MindGeek specifically, we suspended sites that contained user-generated content in December 2020 and acceptance on those sites has not been reinstated,” the company said in a statement on Thursday. “Despite what you may have read in recent days, you cannot use your Visa card on Pornhub.”
The company continued: “The legal decision, with which we disagree, has also created new uncertainty about the role of TrafficJunky, MindGeek’s advertising arm. Accordingly, we will suspend TrafficJunky’s Visa acceptance privileges based on the court’s decision until further notice. During this suspension, Visa cards will not be able to be used to purchase advertising on any sites including Pornhub or other MindGeek affiliated sites.”
In a ruling Friday, a federal judge in the U.S. District Court of Central California denied Visa’s request to be dismissed from a lawsuit filed by a woman who claimed Visa was responsible in helping distribute a sexually explicit video of her at age 13 that was uploaded to Pornhub.com.
“In our view, our company’s role, policies, and practices have been mischaracterized,” Visa chairman and CEO Al Kelly said in a statement. “Let me be clear: Visa condemns sex trafficking, sexual exploitation, and child sexual abuse.”
The move by Visa comes after public pressure from hedge fund billionaire Bill Ackman, who has urged the payments giant to reevaluate its relationship with MindGeek on Twitter and in a recent televised interview with CNBC.
Yesterday, a Federal judge rendered a decision https://t.co/z7ImYJgWHi that no one has likely read. You should. The lawsuit is against MindGeek, the largest internet porn company in the world, and @Visa. Both are culpable. Visa’s conduct here is inexcusable,
— Bill Ackman (@BillAckman) July 30, 2022
“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,” the Pershing Square Capital Management CEO said on CNBC’s Squawk Box Tuesday. “Visa tomorrow could shut down MindGeek.”
In earlier tweets, Ackman also said Visa’s conduct was likely to cause the company “incalculable financial and reputational damage” and create personal and potential criminal liability for the directors of the company under Delaware’s Caremark rule, which places responsibility on corporate boards to make a good faith effort to exercise their duty of care.
“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 is developing. Please check back for updates.)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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