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Credit Card Companies Stymie Porn
Posted by Steven Wu on Monday, November 18 @ 12:09:15 EST Media Regulation
The New York Times reports: New fees imposed by credit card companies are causing adult websites to cry foul. Visa has already implemented (and Mastercard will soon implement) a policy where it charges its member banks a $500 registration fee and a $250 annual fee for each "high-risk company" that the banks pay a credit-card charge to. Technically, a high-risk company is one with a bad credit-card record (that is, a company to which credit card charges are often revoked or disputed, or where there is a great deal of credit-card fraud), a category into which a large number of porn sites seem to fall.

The member banks naturally pass on these higher fees to the designated high-risk companies--which suddenly makes many home-grown porn sites much less profitable than before. Porn-site operators claim that the credit card companies are trying to police online smut, using the technical requirement of "high risk" to mask content-based control. The financial companies claim they're just trying to combat fraud and reduce their losses.

Read the article here.

As to the legal issues: although the First Amendment generally covers government regulation of speech, so that private censorship would seem to be all right, the Supreme Court has also ruled, "There is no sanctuary in the First Amendment for unlimited private censorship operating in a medium not open to all. 'Freedom of the press from governmental interference under the First Amendment does not sanction repression of that freedom by private interests.'" Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 392 (quoting Associated Press v. United States, 326 U.S. 1, 20) (upholding the FCC’s regulation of fair and adequate coverage on radio stations). Of course, a credit-card company adopting facially content-neutral (and reasonable) finance laws is very different from a radio station deliberately choosing its message, so I’d be pretty suprised if a First Amendment challenge to the credit-card companies actually arose out of this situation.

 
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