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The Tech Policy Greenhouse is an online symposium where experts tackle the most difficult policy challenges facing innovation and technology today. These are problems that don't have easy solutions, where every decision involves tradeoffs and unintended consequences, so we've gathered a wide variety of voices to help dissect existing policy proposals and better inform new ones.

Bankers As Content Moderators

from the money-rules-everything dept

In August, porn-subscription platform OnlyFans announced that it would no longer permit pornography, blaming pressure from banks. The porn policy was rescinded after a backlash from platform users, but the incident illustrates how a handful of heavily regulated financial service providers can act as meta-moderators by shaping the content policies of platforms that rely on them. 

How did banks acquire such power over OnlyFans? Although people sometimes express themselves for free, they usually demand compensation. Polemicists, scientists, poets, and, yes, pornographers all need a paying audience to put food on their tables. Unless the audience is paying in cash, their money must move through payment processors, banks, and other financial intermediaries. If no payment is processed, no performance will be forthcoming. 

OnlyFans relies on financial intermediaries in several ways. It must be able to accept payments from users, send payments to content creators, and raise capital from investors. Each of these activities requires the services of a bank or payment processor. In an interview with the Financial Times, OnlyFans CEO Tim Stockey pointed to banks’ refusals to process payments to content creators as the pressure behind the proposed policy change.

“We pay over one million creators over $300m every month, and making sure that these funds get to creators involves using the banking sector,” he said, singling out Bank of New York Mellon as having “flagged and rejected” every wire connected to the company, “making it difficult to pay our creators.”

BNY Mellon processes a trillion dollars of transfers a day. At this scale, OnlyFans’ $300 million a month in creator payments could be lost in a rounding error. Like individual users on massive social media platforms, the patronage of any one website or business doesn’t matter to financial intermediaries. Banks often refuse service to the sex industry because of its association with illegal prostitution. In the face of bad press or potential regulatory scrutiny, it is usually easier, and in the long run, cheaper, to simply sever ties with the offending business. 

This leaves an excluded firm like OnlyFans with few options. OnlyFans cannot simply become a payment processor. Financial intermediaries are heavily regulated. OnlyFans is unlikely to clear the regulatory hurdles, and even if it could, compliance with anti-money laundering laws would strip its users of anonymity. 

Financial intermediaries are uniquely positioned to police speech because they are heavily regulated. While Section 230 keeps the costs of starting a speech platform low, banking regulation makes it difficult and expensive to enter the financial services market. There are hundreds of domain registrars, but only a handful of major payment processors. This disparity makes the denial of payment processing one of the most effective levers for controlling speech. 

Banks have the same rights of conscience as other firms, but regulation gives their decisions added weight. Financial intermediaries are in the business of making money, not curating for a particular audience, so they have less incentive to moderate than publishers. However, when financial intermediaries moderate, regulation prevents alternative service providers from entering the market. 

Peer-to-peer payment systems, such as cryptocurrency, offer a solution that circumvents intermediaries entirely. However, cryptocurrency has proven difficult to use as money at scale. OnlyFans was able to grow to its current size through access to the traditional banking system. At this stage, it cannot easily abandon it. OnlyFans would lose many users if it required buyers and sellers to maintain cryptocurrency wallets. The platform’s current investors would likely balk at issuing a token to raise additional capital. Decentralized alternatives are, for the moment, unworkably convoluted

While financial intermediaries’ power to moderate is not absolute, they can keep unwanted speech at the fringes of society and prevent it from being very profitable. This is not merely a problem for porn. Many sorts of legal but disfavored speech are vulnerable to financial deplatforming. Gab, a social media platform popular with the alt-right, has been barred from PayPal, Venmo, Square, and Stripe. It eventually found a home with Second Amendment Processing, an alternative payment processor originally created to serve gun stores. 

Commercial banks have faced pressure to cease serving gun stores from both activists and the government in Operation Choke Point. Operation Choke Point sought to discourage banks from serving porn actors, payday lenders, gun merchants, and a host of other “risky” customers. The FDIC threatened banks with “unsatisfactory Community Reinvestment Act ratings, compliance rating downgrades, restitution to consumers, and the pursuit of civil money penalties,” if they failed to follow the government’s risk guidance. Operation Choke Point officially ended in 2017, but it set the tone for banks’ treatment of covered businesses. Because the banking sector is highly regulated, it is very susceptible to informal government pressure—regulators have many ways to interfere with disobedient banks.

In 2011, when Wikileaks published a trove of leaked State Department cables, Senator Joe Lieberman pressured nearly every service Wikileaks used to ban the organization. Wikileaks was deplatformed by its web host, its domain name service, and even its data visualization software provider. Bank of America, VISA, MasterCard, PayPal, and Western Union all prohibited donations to Wikileaks. Wikileaks was able to quickly move to European web hosts and domain name services beyond the reach of Senator Lieberman. But even Swiss bank PostFinance refused Wikileaks’ business. Unlike foreign web hosting and domain registration services, foreign banks are still part of a global financial system for which America largely sets the rules.

Denied access to banking services, Wikileaks became an early adopter of Bitcoin. Simply sending money to a small organization was simple enough that even in 2011, Bitcoin could offer Wikileaks a viable alternative to the traditional financial system. It also probably helped that Wikileaks’ cause was popular with the sort of people already using Bitcoin in 2011.

While cryptocurrency has come a long way in the past decade, adoption is still limited, and alternatives to traditional methods of raising capital are still in their infancy. Bitcoin offered Wikileaks a way out, and some OnlyFans content creators may turn to decentralized alternatives. But as a business, OnlyFans remains at the mercy of the banking industry. Financial intermediaries cannot stamp out disfavored speech, but they can cap the size of platforms that host it. Sitting behind and above the commercial internet, payment processors and banks retain a unique capability to set rules for platforms, and, in turn, platform users.

Will Duffield is a Policy Analyst at the Cato Institute

Techdirt and EFF are collaborating on this Techdirt Greenhouse discussion. On October 6th from 9am to noon PT, we’ll have many of this series’ authors discussing and debating their pieces in front of a live virtual audience (register to attend here). On October 7th, we’ll be hosting a smaller workshop focused on coming up with concrete steps we can take to make sure providers, policymakers, and others understand the risks and challenges of infrastructure moderation, and how to respond to those risks.

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Comments on “Bankers As Content Moderators”

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4 Comments
DV Henkel-Wallacesays:

Here is the key factor:

regulation gives their decisions added weight. Financial intermediaries are in the business of making money, not curating for a particular audience, so they have less incentive to moderate than publishers.

As the example of operation choke point shows, it’s bad actors in government elected officials: senators, reps, state attorneys general) who wield the carrot and stick against the banks. Why would a bank turn down revenue?

The stick is a regulatory trade off: go after the “vice” accounts (sex, alcohol. gambling, guns) and we won’t effect more onerous regulations on you.

The carrot is typically not actually cutting these guys off but instead charging them punitive fees, so they can simultaneously show the government how they following the rules and make extra revenue.

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