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California judge denies Visa’s motion to dismiss child pornography case

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Yahoo Finance's legal expert Alexis Keenan discusses how credit card company Visa became implicated in a Pornhub-related lawsuit and its legal liabilities.

Video Transcript

- Welcome back to Yahoo Finance Live. Well, Visa suffering a setback in a legal case that alleges it's liable for the distribution of child pornography on Pornhub and its parent company. A California District judge denied Visa's motion to dismiss the case. For more on this, let's bring in Yahoo Finance's Alexis Keenan. Alexis, you know, give us kind of the back story here for those who haven't been following it, and what are the implications at play here.

ALEXIS KEENAN: So this is a case that is brought by a then, at the time it was brought, 13-year-old girl, who alleges that not only Mindgeek-- this is the parent company of Pornhub and a bunch of other pornographic websites-- that it took part in a criminal conspiracy. But they're saying that Visa also took part in a criminal conspiracy. And this is why.

What this 13-year-old girl is alleging is that because under US law, it makes it illegal to financially benefit from the sexual exploitation of minors that both companies are on the hook here because, A, Pornhub posted this video. And by the way, it was posted unbeknownst to her. It was posted by her boyfriend. So she ended up having very traumatic difficulties with the outflow and the fallout from what happened to her.

But moving aside from that, Visa and Pornhub, both on the hook here still, and the judge in California not letting Visa particularly out of this case. You wouldn't be so surprised if Pornhub was not out of this case, but Visa staying on the hook here, saying that it processed the payments in order to make these transactions happen, that these videos are posted by third parties, OK? So they're not necessarily always produced by the company that's putting out this pornographic material.

And this company has long had problems. There was a big "New York Times" investigation and an article that came out in December of 2020 saying that the company was struggling with keeping underage pornography off of its sites. And Visa was roped in at that time to and at the time had temporarily suspended some of these payments but then got back in the game in part, so continued to process some of the payments for this website.

So the claim here is that they're really co-conspirators and that without Visa's participation here that this crime couldn't really have happened. But this is a civil claim. It's a civil claim saying that there was a criminal violation.

- What is Visa saying for their part?

ALEXIS KEENAN: So Visa has head to Yahoo Finance this pre-trial ruling-- and that's what it is here, right? It's just a preliminary decision by the judge-- is disappointing and mischaracterizes Visa's role and its policies and practices. They go on to say that Visa will not tolerate the use of its network for illegal activity, and they say we continue to believe that Visa is an improper defendant in this case. So we can expect visa to keep arguing that they should not be on the hook here. And the judge, just not convinced that they were not far enough removed from these transactions.

- Yeah, well, the denial in that motion at least for right now making visa very much on the hook. So we'll see how all that develops. Yahoo Finance's Alexis Keenan, thanks so much.