Judge says Visa cannot escape Pornhub related lawsuit

Judges say visas cannot escape Pornhub-related proceedings

This weekend, Judge Cormac J. Kearney of the US District Court in Central California denied a visa dismissal request. Case It claims that the parent company of the website Pornhub, MindGeek, colluded to help benefit from images of child sexual abuse.

Do visas help others make money from illegal images? The court states that it may be possible to proceed with certain claims against Visa based on MindGeek’s role in payment processing.The proceedings were filed by a woman who says MindGeek benefited from a naked video taken when she was. Underage teen It was posted on Pornhub.

• “If Visa knew there was a fair amount of child pornography on MindGeek’s site and the court had to admit it was true at this stage of the procedure, it would handle the monetization of child pornography and advertisers. I knew I was moving money from. To MindGeek for an ad that was played with child pornography like the plaintiff’s video, “Judge Kearney wrote.

The very strong words of the decision warn the payment processor. This early win shows that companies may not be able to easily distance themselves from accusations of fraud by clients.

• Judge Kearney: “If the court combined with the removal of extensive MindGeek content and allegations that former MindGeek employees reported the company’s general concerns that Visa could unplug,” Visa has the authority to refrain from cashing what was cashed — MindGeek’s child pornography cashing, and thus the plaintiff’s video cashing, is directly responsible (with MindGeek). “

Visa argued that the case could disrupt the finances. Visas are a motion to dismiss, and decisions on companies disrupt the financial and payments industry, making it impossible for visas to carry out processing transactions for their jobs for millions of law-abiding companies and consumers. I said I would. A company spokesman told DealBook in a statement condemning “materials for sexual trafficking, sexual exploitation, and child sexual abuse that dislike our values ​​and objectives as a company.” rice field. A visa spokesman said the company did not tolerate the use of the network for illegal activities, called the ruling “disappointed” and “misunderstood the role of the visa” and continued to be an inappropriate defendant. He said he believed.

However, the judge said the visa claim “reminds me that it was” too big to fail “in the 2008 financial crisis,” and not asking the visa to use the service to encourage illegal activity. , Tall order.

What’s happening here

FTC Chair Lina Khan dismissed her staff to sue Meta, Bloomberg Law ReportLast week, the agency filed an injunction to prevent the company from acquiring the manufacturer of the virtual reality fitness app Within. Kahn’s move reflects her more aggressive approach to competition law and Big Tech.

More than 70 current and former Deutsche Bank employees are under tax investigation. An internal investigation of the bank reportedly found that its staff violated rules to help clients evade taxes. Deutsche Bank shared with the prosecutor the results of the investigation, which began in 2015. The Financial Times reported.

Speaker of the House Nancy Pelosi will launch a tour of Asia that may include a stop in Taiwan. China has recently issued increasingly sharp warnings that visits to autonomous islands will probably provoke a military reaction. The Biden administration did not try to stop Pelosi. He concluded that the potential risk of trying to stop the visit was greater than the risk of allowing Pelosi to continue.

Two major antitrust proceedings begin today. The Justice Department has appealed to prevent Penguin Random House from buying rival Simon & Schuster for $ 2.2 billion and UnitedHealth from buying health tech company Change Healthcare for $ 13 billion. ..Both proceedings advance the Biden administration Fight corporate concentration..

Disney fights Visa and Mastercard for fees

Late Friday night, Disney filed an antitrust proceeding against Visa and Mastercard. This is a derivative of the 2005 interchange fee lawsuit against credit card companies, which charges the seller for each transaction and pays the bank that issued the card. Many companies, such as retailers, that rely heavily on credit card purchases claim that their market holdings allow them to effectively price their fees. And they say the end result will be a higher price for the customer.

The proceedings began with a settlement of approximately $ 6 billion in 2012. The first settlement included an agreement between Visa and Mastercard to reduce transaction processing fees for eight months.But including lawmakers Illinois Senator Richard J. DurbinClaimed that the concessions offered by credit card companies were inadequate. Certain major retailers, Like Walmart, Like Amazon, they opted out of the settlement, hoping to get better conditions for themselves. I did it earlier this yearThis means that the proceedings could be how Disney demands money, better terms with credit card companies, or both.

Disney claims that Visa and Mastercard use corporate maneuvers to dominate the industry. When Visa and Mastercard were private companies, thousands of financial institutions, including major banks such as JPMorgan Chase, received interchange fees. In 2006 and 2008, when payment processors were published, it created a sense of separation between them and banks. This was said by some analysts to ease regulatory scrutiny. “We wanted a single company not to be considered a bank cartel,” said Harry First, a law professor specializing in antitrust law at New York University. “One company can set its own price and do what it wants to do.” (This strategy is similar to what the NFL failed to discuss in the Supreme Court a few years ago.)

Although the corporate structure has changed, Disney has claimed in the proceedings, but the behavior of credit card companies has not changed. Disney says the profitable fees Visa and Mastercard have provided to banks remain, with two companies dominating the industry and pushing up costs. “”The debit card market is dominated by Visa and Mastercard, “said the proceedings. “Visa and Mastercard together accounted for about 75% of all debit purchases in 2004 and more than 80% today.” Fees continue to be the focus of legislative action.Senator Durbin and his colleague’s plans Propose a new bill Target them.

“We don’t expect to file a proceeding on this, and we expect a solution to be announced in the near future,” a Mastercard spokesman told DealBook. The visa refused to comment on this record.

“I was surprised at some level when I saw all the surges in buying activity, and I couldn’t collectively see it ending someday.”

— JDDaunt, Chief Commercial Officer of Liquidity Services, Liquidator boom time Because retailers are in a hurry to get rid of the products that were in high demand just a year ago.

Rethink IPO

Initial public offering is one of the most legendary and unsuccessful transactions in the business world.of “Open to the public,” Insider Chief Financial Officer Dakin Campbell, unveiled last week, said venture capitalist Bill Gurley is working to make IPOs more equitable for start-ups and the average investor in 2019. Explains in detail what led to. This effort challenged the management of processes by major banks and triggered various types of transactions, including direct listings and special purpose acquisition companies.

Three years later, some of these non-traditional companies were exposed, their stocks fell, causing significant losses to investors. The other transaction was a complete fraud. DealBook talked to Campbell about the Silicon Valley-inspired IPO “revolution” and its aftermath.

Who has benefited from the changes to the IPO pushed by the Silicon Valley power brokers you describe in the book?

There is no doubt that venture capitalists and other corporate insiders have been successful in direct listings, but the average investor has also come forward. Traditional IPOs provide institutional investors with an early opportunity to buy stock at a lower price than the average investor. Direct listing allows the average investor to access IPO stocks at the same time as institutional investors at market-set prices. It’s much fairer.

Is this good for the economy?

Over the last two decades, the number of companies listed on the US Stock Exchange has declined dramatically. According to some numbers, it has fallen in half. If companies have more options to access the public market, they tend to do so. And that’s good for the state of corporate innovation, the bigger economy, and the citizens who invest in public stocks to build wealth.

However, many of these transactions did not build wealth. SPACs are the biggest losers on the market.

Unfortunately, I think many private investors have lost money. The same was true for institutional investors. Broadly speaking, it’s not as much about the process as it is about the business cycle. Fraud is a completely different matter. The SEC has worked hard to regulate the SPAC market, and I think we can agree that it’s a good thing.

Speed ​​reading

Deals

policy

Best of the rest

• Elon Musk’s Antic turns the fan, Become a buyer For Tesla’s electric cars. (Bloomberg)

• Runner Usain Bolt’s Electric Bike Startup, Bolt Mobility, Seems to have disappeared From some cities in the United States. (TechCrunch)

• Ann Sometimes unrealistic Diplomats are making a fuss about the Netflix show about the ambassador. (Politico)

Please give us your feedback! Email your thoughts and suggestions to dealbook@nytimes.com.