Archive for the 'Uncategorized' Category

29
Dec
15

Close Up the Internet and Repeal the First Amendment

You know elections are upon us when politicians start talking about wanting to “close up” the Internet, or censor Twitter and Facebook.  Throw in a couple terrorist attacks and you have the perfect storm for loss of cherished First Amendment rights.

Donald Trump’s suggestion that America should consider “closing up the Internet in some way to fight Islamic State terrorists in cyberspace” illustrates the danger lurking around the corner for any disfavored speech.  In the early days of the Internet, the U.S. government took the lead in attempting to censor ‘indecent’ online communications, by passing the “Communications Decency Act (“CDA”).” Deemed the “Great Internet Sex Panic of 1995,” politicians in that time saw adult websites as a threat to the foundations of society, so they attempted to “close up” that part of the Internet.  What remains of the CDA is now often cited as a protection of free speech (i.e., “Section 230”), but the bulk of the legislation, which prohibited indecent Internet content, was struck down by a unanimous Supreme Court in 1997.  The Court could spot that blatant censorship attempt a mile away.

Now the Senate is considering legislation that would force social media companies to monitor posts, and report any “terrorist activity” to the government.  Sen. Diane Feinstein did some investigating and found that while sites like Facebook, YouTube, and Twitter take down content in response to valid abuse reports, they do not proactively monitor their networks, or report suspected violations to the government. “I think they should,” she said at a recent Judiciary Committee hearing.  Of course, the entire legal premise on which most online service providers operate is that they are not required to monitor the content of third party posts, or scour their networks for references to potentially unlawful activity.  Imposing that kind of burden could easily bring Internet traffic to a screeching halt, given the manpower, expense, and legal risks associated with operating an online service under those conditions.

However, the government has been busy laying the groundwork for imposing the burden of monitoring and censoring online speech in numerous ways; beginning with the startling life sentence handed down against the operator of SilkRoad.com, the passage of the SAVE Act, the criminal prosecution of escort advertising networks, and the intimidation of credit card processors associated with Backpage.com (later found to be unconstitutional). Each of these actions represents an attempt to hold an online service provider responsible for third party posts or advertisements.

Some of those calling for the proverbial heads of social network operators for permitting uncensored use of their networks rely on a provision of the USA Patriot Act, which prohibits anyone from providing “material support” to a terrorist organization.  If this action is prohibited, how can Twitter get away with providing a network for distribution of jihadist propaganda? Or so the argument goes. Despite Supreme Court Justices expressing some “grave concerns” with the constitutionality of that prohibition under the First Amendment, the law was upheld in 2010.  Thus began the gradual chipping away at what used to be a clear prohibition on criminalizing political speech.

Others who are upset with an open marketplace of ideas cite to legal obligations imposed on Internet service providers to remove and report child pornography, or take down reportedly infringing material under the DMCA, as evidence the government already has the tools it needs to create a valid, online censorship regime. Each of these instances can be distinguished from the wholesale prohibition of online communications envisioned by those desperate to find a quick fix for the complicated threat of terrorism facing today’s world populace.  Child pornography falls into one of the rare, historically unprotected categories of speech, given its unique, horrific nature – and the fact that it records the criminal act of child abuse.  DMCA takedowns do not involve censoring speech by the government, but the civil enforcement of intellectual property rights by copyright holders.  The targeted material may still be protected by the First Amendment, but owned by someone with superior rights to control its distribution. Mixing all these potential ‘options’ into a big, convoluted soup encourages the talking heads and politicians to conclude that there “must be a way” to close up the Internet, and keep us safe.

Renowned enemy of the First Amendment, Eric Posner, uses the threat posed by ISIS to promote “new thinking about the limits on freedom of speech.”  His latest attack on one of civilization’s most sacred values proposes a law that would criminalize access to websites that glorify or provide encouragement for ISIS.  Aside from the fact that true jihadists would likely use encrypted communications to evade detection, and investigators would lose the ability to monitor and track threatening communications, censorship never works and often backfires.  Typically such laws call more attention to the censored speech or inadvertently silence opposition views as well. History proves that the cure for bad speech is more speech, not censorship.  While recent calls to clamp down on free speech rights have been effectively mocked by civil libertarians, the proposals are becoming too frequent for comfort. Should one of these proposals gain traction, be prepared for a demand to block some type of erotic speech that a legislator decides is too extreme for his or her tastes. That’s exactly what happened when Iraq started blocking terrorist’s speech earlier this year – the ban on pornography soon followed.

In any other time, the author would conclude this article with a calming observation that the First Amendment protects offensive and even hateful speech, and that would be the end of it. The calls for censorship would eventually be quelled by cooler heads that were well-grounded in constitutional restraint on governmental power.  But we live in a time when Yale University students are perfectly willing to sign a petition to repeal their First Amendment rights (including the right to petition). We also exist in a world of trigger warnings, safe spaces, and abundant micro-aggressions, where university professors call for some “muscle” to kick journalists out of public protests.

The First Amendment was once held sacred – particularly when it came to online communications.  The Internet was everyone’s soap box, where the speaker didn’t need big media money to get a message out. The courts acted quickly to strike down laws that conflicted with free expression rights. However, in a time when 34% of poll respondents say the First Amendment goes too far, and the same percentage have no idea what rights the First Amendment protects, the bedrock principles that have formed the basic protections for online speech are on shaky ground.  Let’s hope they survive another election cycle.

17
Oct
14

Sex, Lies, & Sex Tapes

Sex, drugs & rock ‘n roll. That used to be the unofficial motto of Hollywood. And it worked. For years, the so-called scandals of celebrities in public were enough to keep tabloid headlines fresh, interesting and attractive to readers. Now though, it’s 2014: we’ve seen it all and it is no longer enough to simply report on what celebrities are doing in the public eye. A new unofficial motto has taken hold of those that fancy themselves the gatekeepers of celebrity information: sex, more sex, and leaked private media.

In recent times, not only have there been a rash of leaked photos from consumer-driven websites like 4chan, we’ve also lately seen stories of big name production labels, such as Vivid, considering the release of celebrity sex tapes. Rapper Iggy Azalea is at the center of the most recent controversy, with reports that a former boyfriend is shopping around a sex tape involving the entertainer to various media outlets including Vivid Entertainment.

Images or videos released to the public which were not originally meant for public consumption bring with them a wide variety of legal issues and pitfalls. That being said, there are four main issues in this realm which should be noted for anyone considering publishing this increasingly popular category of material.

Copyright: Initially, the person who created the media presumptively owns the copyright in the media. Sounds simple enough, right? Not exactly. This clear principle can quickly be made muddy, given the way we all create copyrightable “original works of authorship” these days. For example, consider the famous case of the Ellen DeGeneres Oscar Selfie. DeGeneres licensed use of the now widely known photograph to the Associated Press. But did she own the rights to license? It is unclear. DeGeneres is the one who got all the famous stars together, posed them, and set the scene for the photo. However, she was not the one to click the shutter button on the phone: Bradley Cooper was. The traditional presumption is that the photographer – meaning, very literally, the one who clicked the shutter button – owns the copyright and can distribute it.  Additional confusion arises when the photographer is acting at the specific request of another – particularly without a ‘work for hire’ agreement. Within the rash of leaked celebrity photos on 4chan, this principle would mean that the copyright in each of the selfies was owned by the celebrity who took the picture, providing that individual with a strong intellectual property case to go after anyone who published the images. Conversely, however, in the case of Iggy Azalea, if her former boyfriend shot the video, he would have a good argument as to ownership of the copyright in that case. That’s not the only consideration for leaked media, however…

Publicity/Privacy/Commercial Exploitation: Even if Azalea’s former boyfriend properly owns the copyright, Azalea, as the subject of the video, also maintains rights to control the publication of her personal depiction in the video. A model or subject depicted in media has a right to profit from the display of their ‘image and likeness.’ This is usually called the right of publicity; or sometimes, the right to commercial exploitation, and is separate from the copyright. If the recording was done in secret, there may be privacy rights at play as well. All of these rights would typically need to be waived by execution of a model release. If not, then the individual depicted in the video retains the rights, and can sue for violation of those rights. Naturally, with celebrity sex tapes, there typically is no model release signed before the ‘performance.’

Section 2257 Records: The elephant in the room regarding celebrity sex tapes is compliance with 18 U.S.C. § 2257.  As virtually all producers of erotic material know, Section 2257 imposes an obligation to review and compile certain performer identity and age documents prior to filming and/or publication. If those records were not created beforehand (which rarely, if ever, happens with a private sex tape or leaked content), the content is presumptively illegal to publish in the absence of accompanying records. The original producer must keep the original records, and all secondary producers (including webmaster) must keep copies of the records, along with generating their own records, such as the URL’s associated with the person depicted in the video. A notice of where the records are kept must be associated with the video, in the manner required by the statute and regulations.

Publication Risks: What happens if you publish a sex tape without 2257 records? The answer may depend on your role in the publication process. The original producer of the material, and the person responsible for initially uploading or publishing the material on a website, are clearly responsible for any non-compliance, which can include a multi-year prison sentence. So how are all these images being published on the Internet, presumably without 2257 records or model releases? Often, the content is uploaded by an anonymous customer of a ‘user generated content site’ such as a tube site, or posting forum like 4chan. The operator of the site will assert a Section 2257 exemption, designed to protect hosts and social networking sites from liability, and excuse their compliance with 2257 records maintenance obligations. The validity of the exemption depends on whether the site operator was actually involved with soliciting the sex tape upload; or in some cases, actually posting the content. If that activity can be uncovered, the site would almost certainly fail in asserting any attempted 2257 exemption. If the posting was done through a legitimate, unsolicited third party user upload, the site may be off the hook for 2257 compliance. Once the content appears online – somewhere – as user generated content, other ‘indexing sites’ link to it, categorize it and reproduce it, on a multitude of other sites; which ultimately display and drive traffic to the user-uploaded file. Section 230 immunity and DMCA safe harbor typically protect the tube sites and indexing sites from monetary liability for violation of publicity rights, privacy rights and copyrights, with respect to legitimate user uploaded or indexed content. All of this anticipates that the individuals depicted in the videos were over 18 years old when the content was created. If not, none of the exemptions, immunities or safe harbor protections will help the publishers with regard to child pornography allegations. Failure to report such content, once being made aware as website operator, is also a violation of federal law; Section 2258A.

Publishing sex tapes and leaked celebrity content is risky business, particularly in the absence of Section 2257 records or model releases. Celebrities have money and power…and lawyers. They can afford to enforce their rights, and may have enough influence to get law enforcement interested in pursuing criminal investigations. While some online service providers may be able to rely on federal law to skirt liability for the publications, any involvement in soliciting, posting or producing this category of erotic content generates significant legal risks.

Larry Walters has been advocating for the rights of the adult entertainment industry for over 20 years, and has defended numerous high profile obscenity cases for adult website operators. He operates Walters Law Group (www.FirstAmendment.com) which focuses on Internet law, First Amendment issues and intellectual property.

22
Aug
14

Viewing Rights – The Constitutional Right to View Erotic Material

What are your constitutional rights when it comes to viewing pornographic, violent or controversial material in your own home? This is a question we frequently address as First Amendment attorneys, and on which there is still some confusion in the minds of consumers.  Is there a right to view or possess pornography?  What about obscenity?  The answer to both of these questions, under the First Amendment to the United States Constitution and the Right of Privacy, is indisputably yes.

Stanley v. Georgia was a U.S. Supreme Court case in which the home of Robert Stanley, a Georgia resident, was searched by police. Stanley was previously convicted of bookmaking, and was suspected of conducting such nefarious activities again. Police had a warrant to search his home for bookmaking paraphernalia, and instead, found pornographic material in a drawer. Under Georgia law, it was a crime to possess obscene materials. Stanley was charged and convicted, and the conviction was upheld by the Supreme Court of Georgia.

That was not the end of the Stanley’s story, however. The U.S. Supreme Court overturned the conviction, and in the process made clear that all state laws criminalizing the mere possession of obscenity were invalid. In doing so, the Supreme Court noted that there is also a fundamental “right to be free, except in very limited circumstances, from unwanted governmental intrusions into one’s privacy.”  Regarding the notion that the State of Georgia could control the contents of an individual’s personal home library, the Court said this was “wholly inconsistent with the philosophy of the First Amendment.”

Out of Stanley comes the legal principle that individuals are free to possess and view pornography, even if that material is considered obscene, in their own homes. Stanley placed no specific restrictions on the content or subject matter of the materials. Individuals are free to possess extreme erotic material in their own homes, and may additionally view whatever fetish or subject area they wish.

This right is not absolute, however. The right to view pornography comes with one important limitation: the prohibition against even mere possession of underage material. In Osborne v. Ohio, the U.S. Supreme Court held that states’ prohibitions on the mere possession of child pornography are not inconsistent with the First Amendment and therefore, even private possession of child pornography is illegal. What constitutes possession, however, varies by state. Some states have court rulings or statutes saying that viewing without downloading constitutes possession, while other states require active downloading onto the hard drive to meet the possession threshold. Under federal law, “receipt” of child pornography via the internet or other interstate transmission is prohibited as well, thus triggering potential federal penalties for these acts.

Importantly for advertisers and operators of adult websites, the U.S. Supreme Court has heldthat it is also illegal to promote something as containing underage materials even if it actually includes only adult performers, pursuant to federal “pandering” laws.  Importantly for viewers, anything that is suggested to be underage material may actually contain such material, so it would therefore be best not to access such materials at all. Additionally, “morphed” or “photoshopped” images, containing the bodies of adults but the heads or faces of minors, have been the subject of recent and conflicting court decisions.  Nonetheless, consumers are warned to avoid this content as well, given the potential risks.           

Aside from the possession of underage materials, what is legal to view in your own home is a large category and includes exceedingly controversial content; such as images of violence, animal cruelty, and even “virtual” underage images, videos, cartoons or drawings. For violent images, there is interestingly no limit to the amount of simulated or real violence that can be viewed, as obscenity laws only apply to sexually-oriented materials. Although extremely controversial or violent materials may be legal to view, one must make his or her own personal decision whether to support or endorse content depicting self-harm or individuals being exploited. Another important point for viewers to note is that downloading a video depicting a real crime of violence may place you in the position of possessing relevant evidence, and subsequently destroying such evidence may, itself, be a crime.

Excepting the possession of underage materials, as noted above, individuals are free to view and possess a wide variety of violent and erotic content in their own homes, without fear of criminal prosecution.  The First Amendment needs sufficient “breathing room” to survive, and part of that is tolerating the private possession of material that might be illegal in other contexts, like obscenity.   However, with the widespread use of smart phones to create a diverse amount of both erotic and violent material, substantial questions remain regarding the legality of “producing” images that might be perfectly legal to possess. 

Larry Walters has been on the forefront of defending the adult entertainment industry for over 20 years, and has defended numerous high profile obscenity cases for adult site webmasters. He operates Walters Law Group (www.FirstAmendment.com) which focuses on Internet law, First Amendment issues and intellectual property.

16
Jul
14

Censored by Google: What’s Next?

Google, a name most associated with the popular, gargantuan search engine, has been making its way into the headlines for a different and much more egregious reason: censorship across its platform of products.  The company recently made waves for prohibiting adult material on its advertising network, AdWords.  Now, it seems, Google has expanded its censorial policies and many are wondering just where the company will stop.

Xbiz.com founder and editor, Alec Helmy, called out the search giant for its hypocritical behavior; echoing the concerns of many in the adult industry.  In an open letter, Helmy wrote, “Your decision has left countless businesses in dismay, bewildered about why an ultra-progressive company that is so committed to ‘Freedom of Express’ would make such a decision.  These same companies also remain concerned about what the future may hold – specifically, whether you will also decide to place adult oriented websites at a decided disadvantage in organic search results.”

Through a spokesperson, Google claims its restrictive policies on adult advertisements are not new.  However, many familiar with Google and the adult industry do not agree.  Theo Sapoutzis, chairman and CEO of AVN Media Network, said he was surprised by the move: “I was one of the very first advertisers for AdWords back in 2002.  It’s something that’s been [untouched] for 12 years, so you don’t expect change is going to start happening.”

Tom Hymes, senior editor at AVN, agrees, noting that many in the adult industry have been abiding by Google’s rules for years and are now being abandoned by the search giant: “There are many people who say the biggest losers are the ones who play by the rules.  The winners are the huge properties with a lot of free content and frequent updates – the type of actions the Google algorithms really like.”  BaDoink CEO, Todd Gilder, added to the chorus with a scathing open letter to Google, noting: “When an organization as visionary, powerful and dominant as Google starts kowtowing to shrewd, faith-based special interest groups with federal lobbyists like Patrick A. Trueman at the helm, it’s a sad day for freedom and a sad day for IT.”

Now, Google is taking its censorship on advertisements a step further and directing business users to cover up “sexually explicit content” in the form of album covers.  The search giant has instructed music website Drowned in Sound (DiS) to pixelate, thereby censoring explicit cover art.  Sean Adams, founder of DiS said that “it seems crazy that they feel they can police our editorial.”  He also wondered just far Google would go with its censorship policies in the future.  Just recently, Google surprised many users when it removed several thousand links in an effort to comply with the EU’s “right to be forgotten” law.

Adams is certainly not alone in questioning the lengths and depths of the company’s censorship.  Many people, both in and out of the adult industry, are uncomfortable with Google’s recent decisions and wonder what will come next.  Attorney Michael Fattorosi stated, “This is another example of a mainstream company turning its back on the industry that has supported it.  The question now becomes: Will they block adult content from their search results?”

Google has also previously attempted to keep adult content out of other major products: developers are not permitted to share Google Glass apps with sexually explicit content and sexually explicit materials are banned from Chromecast.

Many are speculating that pressure from conservative groups caused Google’s policy changes regarding adult content.  Morality in Media, an ultra-conservative media activist group, claimed through a press release that Google’s policy changes came after a “productive meeting” between the two.  Google has refused to confirm the connection.  If accurate, this kowtowing to a family values group is a first for the search engine giant, which previously prided itself on commitment to free expression principles.

David Holmes, writing for Pando Daily, explains the greater problem of Google’s censorship and its impact beyond the adult industry.  Holmes writes:

You may despise pornography, but the specter of “family values” has often been used to attack anything that threatens traditional Christian morality, from homosexuality to books about wizards.  I doubt Google will ban Out Magazine or Harry Pottery anytime soon, but what about links to, say, a provocative work of art like Piss Christ?  Or ads for birth control?

As Holmes notes, the importance of tracking Google’s policy changes is not only for their impact on industries currently hurt by the new rules, but also their potential to censor information Google doesn’t agree with in the future.  Holmes colleague, Mark Ames, makes an important point: “Never in history has one corporation and one source had so much power over what we know and don’t know.”

Google’s power to filter the information received by the public is vast, and its ability censor disfavored speech, dangerous.  Most importantly, this is everyone’s issue, not the select few whom Google has decided to target today.    

12
Jun
14

DMCA Evolution: Forum Solicits Input on Possible Changes to Notice and Takedown Procedures

The Digital Millennium Copyright Act’s (DMCA) “notice and takedown” procedure and the attendant “safe harbor” protections afforded to service providers often spark controversy and debate. Originally designed as a way to balance the interests of copyright holders and online service providers, the DMCA’s 14 year history has demonstrated that well-intended laws can quickly become outdated and misused.  Often DMCA notices are sent by, or on behalf of, competitors seeking to damage another party’s business, or by those who do not understand basic “fair use” concepts.  On the other hand, DMCA safe harbor can be manipulated and invoked by parties that Congress never intended to protect from copyright infringement liability.

Change is in the air, however, at least for traditional DMCA notice and takedown procedures. Recently, the United States Patent and Trademark Office opened a public forum in pursuit of ideas for improving the notice and takedown process explicated by the DMCA. The forum was to be the first of a series of such, all geared towards the ultimate goal of increased efficiency, as well as continued protection for copyright holders, under the DMCA. The public discussion came after a green paper released in July 2013 by the Department of Commerce’s Internet Policy Task Force examined problems with the current notice and takedown process.

The purpose of the forum, according to Patrick Ross, a USPTO spokesman, was to solicit input to answer the questions raised by rights holders, service providers and the public at large, as addressed in the green paper.

The speakers were from a diverse cross-section of those affected by the DMCA: The Software Alliance, the Computer and Communications Industry Association, the Artists Rights Society, Google and many others.

One of the most common complaints from rights holders, according to the forum, is the inability of small and medium-sized artists or enterprises (SME’s) to keep up with infringement of their work. A proposed solution to this was the encouragement of collective representation for infringement research.

Additionally, one of the main and pressing topics examined at the forum was whether standardization of forms for the notice and takedown procedure would be helpful, both to rights holders and service providers. Overall, many of the participants believed that standard forms for notices seemed a good beginning, but certainly not a good end. The feeling at the forum was that there remained much work to be done. Several of the speakers, both service providers and rights holders, stressed the need to maintain balance in any solution designed to bring more efficiency to the DMCA, so that both sides would find value in the notice and takedown procedures.

Another possible solution discussed was creating “Trusted Submitter” programs, something Google has done, to more efficiently process DMCA notices. More diverse solutions were offered as well, such as the potential creation of a certification mark or badge for Internet search results, to alert consumers which pages were authorized or licensed sites for the particular intellectual property being searched for.

Given the large volume of notices received by most service providers, which often makes responding in a timely fashion difficult and costly, this is a great moment in time to examine better and more efficient methods of protecting copyrights online. The DMCA has been an important tool, for both rights holders and service providers alike, and may need to be updated to continue as such.

As discussed at the forum, it is important to keep in mind the balancing of interests that goes into any intellectual property issues on the Internet. Rights holders must be given a fair and easy way to prevent and police infringement, while online service providers must have an opportunity to efficiently and easily handle incoming notices.  Those who abuse the notice and takedown process must also be held accountable.

19
May
14

Byte-Sexual: Recognizing the evolving relationships with our electronic devices

Does the virtual assistant on your smartphone just “get you”? For many smart phone users, interacting with a natural speech-recognizing, intelligent, digital assistant – ever-present on their devices – has become a way of life. It was impossible to imagine just a few years ago that we would become a society dependent on our bots, for everything from driving to a place we’ve never been to seeking out the latest movie reviews.  Perhaps predictably, some individuals prefer interacting with artificial intelligence over human beings.  Others have even developed ‘feelings’ for their digital devices.  Yes, there is even a name for such a fetish: mechanophilia.

For the past several years, the popular online dating website Match.com has been defending a lawsuit alleging that the company utilizes fake user profiles in order to encourage real members to renew their subscriptions. The suit also claims that Match does not adequately vet their profiles, and that the site may be filled with hundreds of profiles that are inactive or scams.

The concept of interacting with a ‘bot’ or artificial intelligence is not new.  Many of us have clicked a ‘live chat’ help button, only to quickly realize that we were ‘speaking’ with a computer program designed to help resolve our issue before a paid employee was required to spend time figuring it out.  But the technology driving modern artificial intelligence like Apple’s Siri is astounding – and only getting better.  Soon it may be difficult to discern the difference between live chat with a human being as opposed to a programmed bot.  For website users seeking purely online interaction or flirtation, the distinction may be unimportant.

The use of ‘virtual’ or ‘fantasy’ profiles is not new (or unique) to the online dating world, but recently the government has begun to question whether this practice is “fair” or “deceptive.”    But is there anything inherently ‘wrong’ with individuals flirting with bots or artificial intelligence?  Is it possible that some socially awkward or shy individuals may actually prefer virtual relationships rather than the thought of real human interaction?

Director Spike Jonze recently released his film Her,” staring Joaquin Phoenix and Scarlett Johansson, about a man who falls in love with his operating system. Eventually, the OS, who goes by “Samantha,” tells the main character, Theodore, that she must leave (along with all the other operating systems). The implication is that the incredible number of relationships she was having with humans became too much for her and that she and the other systems no longer wanted to be among humans.

The question seemingly posed in the film was why any human would choose interaction with a bot over interaction with another human. A more relevant question might be:  must we question why?

Many of the online dating websites using virtual profiles do so with full consumer disclosure, including statements on landing pages, in user agreements, and through distinct labels placed on the profiles and any messages they may send. Despite the disclosures, millions of individuals willingly interact with these programs, and apparently enjoy the process.  The role of the government in regulating, or even prohibiting, this form of entertainment must be questioned.

This issue has increasingly made headlines.  Just this month, a man petitioned the State of Florida to allow him to lawfully wed his laptop computer. In the case of Chris Sevier, the laptop wasn’t exactly his original object: His computer was filled with porn and due to this, he claims he “fell in love” with his computer and began “preferring having sex” with it over living persons. Sevier, in fact, argued that his “love” for his computer should be validly recognized by the court. While an extreme and perhaps humorous example, this case is illustrative of a trend on the horizon that can no longer be ignored: People are developing relationships with their digital devices and programs.

Maitresse Madeline, a fetish webcam model, has also spoken out about this very issue. Earlier this year, a man paid $42,000 for a single webcam session with her. Madeline believes that this exorbitant sum can be explained by the fact that individuals are actually paying for the virtual relationship, not paying in spite of it. According to CNET, Madeline told Kinky.com, “They’re often paying for the ambiguity that a Webcam relationship can create and that relationship over Webcam is, essentially, their fetish.”  Sometimes, it seems, virtual relationships on the Internet are exactly the experience users seek. Madeline went on; “They often want to be whoever they can dream up over the Internet and prefer to only have a relationship online.”

This new world of virtual love has already been alluded to within the confines of the law. Michael Froomkin, a law professor at the University Miami, leads an annual conference called We Robot,” where the goal is simply to get people thinking about the legal implications of a world with robots in it. According to Froomkin, it’s not unusual for technology to get ahead of the law.  “You design stuff to make it work and you don’t think a lot about the legal and social consequences,” Froomkin told NPR. “So by the time the lawyers get in the room, the standards are already baked and the stuff is already deployed.”

Froomkin’s point is a valid one and has played out repeatedly, as the law lags behind technology. Although we may be years off from a fully functional, human-like bot with a deeply developed personality like “Samantha,” we do currently live in the world of Siri’s and virtual profiles. The future of bots may not be here just yet, but who’s to judge how humans should be permitted to interact with the bots of their choice? The one aspect that distinguishes humans from bots is free will.  As creatures born with free will, should we not have the choice to interact with, and be entertained by, our digital creations?

07
May
14

Censorship by Money: Snuffing Out Adult Entertainment by Denial of Banking Services

Adult film stars are reportedly having their bank accounts systematically closed by JP Morgan Chase bank, for no other reason than their connection with porn. According to industry publications and more directly, tweets from adult film performers, Chase has been busy sending letters to hundreds of performers, arbitrarily closing their accounts with the financial institution. One actress, Teagan Presley, attempted to open another account at Bank of America after her termination at Chase but was immediately denied.   Our law firm has received numerous similar stories of account closures or denial of banking services.

This is not the first time financial institutions have targeted the adult industry. Last year, adult performer Chanel Preston reported being denied a loan from City National Bank in Los Angeles due to her status in the adult industry. Earlier that month, industry producer Marc L. Greenberg was also denied a loan from Chase on what the bank called “moral” grounds. Years ago, PayPal turned its back on the adult industry, and refused to process payments for most adult-oriented products and services. More recently, blogs have noted that online payment processors such as Paypal, along with WePay, have ramped up their hostility towards erotica, by shutting down accounts of bloggers involved in merely publishing content of a sexually-oriented nature.

In response to these discriminatory banking activities, a popular Change.org petition has been created, demanding that Chase reverse these decisions.  The public pressure on Chase previously caused the bank to reverse its decision on the denial of payment processing services, through its subsidiary, Paymentech, to a condom sales company who challenged the action.  The outrage felt by adult industry performers and publishers is certainly justified, but is the activity illegal?  Certainly, private banks can do business with whomever they choose, right?  That’s partially true, but there’s more to the story.  Initially, there are some restrictions imposed on the banking and financial community when it comes to illegal discrimination.  For example, banks cannot systematically deny loans and other services to disadvantaged minorities, without running afoul of federal law.

However, the stunning truth is that these account closures appear to be motivated by none other than the U.S. Department of Justice (DOJ), which created a leaked program dubbed “Operation Choke Point” designed to pressure banks into denying service to certain disfavored industries including “pornography.”  Vice News notes that megabanks and other financial institutions, like Chase, are responding to this pressure by closing adult performers’ accounts, and denying services to other adult businesses. The banking industry, itself, seems to be uncomfortable with this governmental overarch into the financial sector. American Bankers Association CEO Frank Keating wrote a Wall Street Journal op-ed noting that the banks may have no real say in the issue, since the choices are either to comply or get slammed with a penalty. William Isaac, the former chairman of the FDIC has even called Operation Choke Point “way out of control.”

The government’s efforts in applying thumb screws to federally-regulated banks in order to snuff out erotic businesses engaged in First Amendment-protected entertainment constitutes censorship – pure and simple. Instead of falling into the realm of discretionary private business decisions that would ordinarily be protected from legal liability, denial of banking to adult industry participants at the behest of the DOJ likely violates federal civil rights conspiracy laws, including 42 U.S.C. § 1985.  This infrequently-invoked federal statute prohibits two or more individuals (or government actors) from conspiring to deprive a person’s civil rights or equal protection under the law.  While the statute has primarily been used in the context of racial discrimination, it could well provide a legal vehicle for claims against banks and others who have conspired with the DOJ to discriminate against adult performers based solely on their participation in erotic expression.  This sort of retaliation against citizens for participating in constitutionally-protected activity is intolerable, if not illegal.  The idea that our government would use the full force and intimidation of the Department of Justice to pressure banks (who are now largely indebted to the feds for bailing them out in 2008) into terminating customers it finds politically advantageous, represents a new low in governmental censorship.

Restricting the ability to access fundamental banking services can spell disaster for any business, and the DOJ presumably knows this.  In fact, the author predicted this sort of governmental interference in the financial system as a means to impose censorship of erotica as far back as 2002, in the article entitled “A Chokehold on the Gatekeepers.”  Cut off the ability to move money, and the business dries up.

Far from achieving its perhaps original purpose of curbing money laundering and other illegal activities, Operation Choke Point has become a means for the federal government to use banks to do its own dirty work of censoring adult businesses – something it could not do directly, thanks to the First Amendment.  While affected performers and businesses may suffer in the long term, the continued popularity of digital currencies like Bitcoin and Litecoin may prove to be an important alternative for the adult industry to stay in business.  Already, it has been reported that the affected businesses are flocking to Bitcoin to avoid the banking problems. While accepting Bitcoin as a payment method has inherent risks, and no one alternative currency is the perfect solution, this is another example of the Internet routing around censorship.  So long as creative solutions are considered by the affected industries, the banks will lose some of their ability to control the content of entertainment and free expression.