PHOENIX — Looming age verification laws will dramatically impact the adult entertainment landscape on a global scale, as the U.K. and a myriad of nations including the U.S. seek to safeguard minors in ways that could catch unprepared companies off guard.
The Phoenix Forum held a critically important panel examining the financial fallout and potentially draconian pitfalls inherent in enforcing such strict legislation, during a sobering discussion led by the Free Speech Coalition (FSC) and Association of Sites Advocating Child Protection (ASACP).
Titled “Due Diligence: Leading the Way in Age Verification and Online Child Protection,” the illustrious panel included Tim Henning, executive director of the ASACP, Eric Paul Leue, executive director of the FSC, Gary Jackson, managing vice president of sales and internet markets at CCBill, Rudd Apsey, business development director of VeriMe, Steve Winyard, director of ICM Registry and David Cooke, director of digital and new media at MindGeek — many of whom are deeply involved in shaping parliamentary U.K. policy via the House of Lords’ Digital Policy Alliance think tank.
After everyone introduced themselves, Henning explained the role of the ASACP. “We’ve been the industry-funded child protection organization since 1996,” he said. “We’re heavily involved with anything that has to do with child protection and related legislation. We have a budget level to suit everyone, for membership… starting at $300 a year, less than a cup of coffee a day.”
Leue spoke next, remarking, “As the executive director of the FSC, we are involved with lobbying on your behalf. We’ve recently won Prop 60. Tim and I work closely together, because we too are a membership organization. So, there is a large conversation in the outside world about all the effects porn can have and I think what we want to do today is dispel any of the misguided notions and disinformation. We’ve been fighting 2257 only because of the burdensome regulatory aspects involved and privacy issues. We recently won a victory on first amendment grounds, which should hopefully protect us from similar restrictions coming down the pipeline.
“When 2257 first rolled around, we proposed a different version, but the government said ‘no, we’ve got this,’” he explained. “Every time we self-regulate, the outside world is less likely to come after us, so it’s important to be proactive. As we are sitting here in Phoenix, Arizona, there’s currently 24 legislations in place that are trying to stop traffic to adult sites. There’s a lot of conversations around age verification, and we’re not against that, but there’s some really mean rhetoric involved.”
Elucidating the role of CCBill in age verification, Jackson said, “I’m the managing vice president of CCBill. We are a payment services provider. But we’re more of a payment processing platform, related to all of these issues we’re talking about today.”
Folding his hands, Henning queried, “Obviously, CCBill is a hugely compliant company. You’ve supported FSC and ASACP, but I wanted to ask from a biller’s perspective, what are your concerns?” to which Jackson candidly replied, “Well, from an impact standpoint we’re very concerned this is just going to kill porn in the U.K. and from a financial standpoint, I’m sure you have a similar concern on tube sites.” He turned to Cooke from MindGeek, who nodded his agreement. “The last thing anyone wants is to be identified while they’re visiting these sites, because then it’s stored online forever,” Jackson continued. “As a processor, we are post-access to the website, so if we end up having to create a whole system to communicate with another external system, then it gets tricky. Look at 2257 now, with the Visa and Mastercard requirement. As a biller, we’re beholden to the banks, and we have concerns whether Visa or Mastercard will be able to enforce this.”
Clarifying the matter for panel attendees, Leue inquired, “Does that include prepaid cards?”
Jackson responded, “I believe those are also blocked, because a kid can get those. If we want to self-regulate, there needs to be a financial kick to it. The U.S. has freedom of speech, so it’s a bit more complex, but the issue is, we get complaints for being censors of content. But the reality is, we’re censoring access to the content. It’s not suppression of speech because you can still access that content. So, they can control it from a financial standpoint in the U.S., but they can’t control it by just accessing the content.”
Shifting the conversation, Henning suggested, “Let’s discuss the Digital Policy Alliance. Some of us explore these issues with the House of Lords, which is as high up in the food chain as you can get in the U.K. They go out and find as many experts as they can, then we all meet in the House of Lords and focus on nothing but this. There’s people from the e-cig industry, gaming commissions… anybody that’s related to the sale of age-restricted goods and services. We’ve spent hours hashing out the difficulties in dealing with these things. So, we’re effectively the technology think tank for the government, offering views and opinions about how this will work in the world. Of course, the politicians have the attention span of a gnat, so you have to present it all very simply.”
To this, Apsey chimed in stating, “We currently provide age verification in the U.K., where I’ve also been working with the government to framework some of the things that have gone into effect. The government approach is not to ban porn, not to run a database or anything, because they want anonymity in place. They don’t want to know the identity of a user, so much as the probability that person is at least 18 years old. There are laws about what kind of porn you can put into a magazine, and it looked like the government was trying to apply that to the internet for a time. Providing the act being depicted is not deemed obscene like bestiality, if it’s not covered behind different laws, you shouldn’t have to change your inventory. The government is not as concerned with the 15 to 16-year-old who tries to get around internet barriers, as they are for the very young child who searches ‘pussy,’ looking for a cat. That’s what they want to prevent from happening.”
Winyard jumped in, underscoring how tricky it can be to determine who precisely is responsibile for age verification at various levels. “We register the top domains in XXX at ICM Registry and I also sit on the Digital Policy Alliance in Westminster, which has advised the government, steering them into creating the Digital Economy Bill,” he related. “A lot of politicians in the U.K. were unhappy about the parental responsibility for preventing young kids from accessing adult content. The reality was, none of these things were really working. The conservative government, in their manifesto, said, ‘We’ve had enough of this now.’ Over the past couple years, this law has taken shape.
“If you get traffic from the U.K., on what we expect to be D-Day, if you don’t have an age verification system in place, you will have several different impacts,” Winyard gravely warned. “Certain providers would be told to stop processing transactions, like Visa and Mastercard. They would then be able to stop ad networks and any mechanism you generate revenues from. If you fail to comply, they’d send you a huge fine. If they can’t find you, the ISP will turn off your website. The reality is, it doesn’t matter whether you’re small or big — age verification has to be put in place. While it’s easy to point at the U.K. and say it’s only happening there, there are 20 countries looking into this. For example, Canada, Iceland and Australia, as well as many countries in Europe, as well as the U.S., are watching what’s happening the U.K. very closely.”
Leue then shared his perspective on how nuanced and uncertain age verification procedures can be, while pointing out domestic examples of strict laws. “One consideration is: Do paysites need to have an additional layer of age verification, with SFW pictures, before users sign up to pay monthly?” he posed. “Before I go on Wicked.com, I would have to age verify first, which means every source of traffic has to be age verified first. What’s the cost of age verification? I imagine if you have… I don’t know how many hits you have, some have 27 million a week… are they going to verify that many people for one dollar each time? Whereas a magazine can be grabbed, purchased and then age verified at the counter, now people have to prove their age before they even grab hold of the magazine, in a digital sense.
“So, the cost of checking each person is a huge concern, and piracy is also a huge issue,” he elaborated. “It seems like it’ll be easier to use torrent sites. When I was 14, we used torrent, because tube sites weren’t a thing back then. Mind you, the FSC is all for age verification to prevent minors from stumbling on something. But as we look at the landscape in the U.S., there’s a Utah law that we opposed, but of course it was voted in, that would make adult sites liable if an adult goes on the site and shows the content to a child. PornHub would be liable because it didn’t prevent the adult from sharing that content. And there are upwards of 64 pieces of similar legislation out there. In South Carolina, where the state wants to charge you money to unlock your device, paid to the state, you basically would have to be at the ‘porn DMV’ to access porn.”
Cooke, whose company owns and operates PornHub, relayed, “The line right now, that defines you as a porn site, is having any softcore or hardcore porn. Soon as you get to PornHub, you’ll be greeted with a box that asks for age verification. But you can’t just have them click ‘Yes’ and that’s it. So right now, the government is looking at using credit cards, mobile phones, license plates and other intense personal data to verify identities. If pornography is your primary business purpose, you’ll be looked at first, for any content. There has to be a commercial component to the website, but that doesn’t rule out tube sites, because they make money off it. The whole system is for children who stumble upon pornography. It’s not for people seeking it out.”
Underlining the likelihood of larger sites like PornHub getting hit hardest initially, Winyard forecast how governments would prioritize enforcement and fines. “The reality is, there are millions of sites in the world, and no way a regulator can get to that unless they have 5,000 people working on it,” he said. “So, since MindGeek is the biggest company in porn, they’ll go after them first, then the top 50, and so on. But, you run the risk of running afoul and getting your site switched off if you’re not compliant, period. So, even though it’s being rolled out gradually and it’s not necessarily draconian, it’s going to get everybody.
“To age verify, you can use a mobile phone number and the cost of that would vary depending on who you use,” he continued. “Let’s say between five and 10 pence. A credit card would be about the same price. The other issue, is there are several million visitors a month to the U.K. from all over the world, and to be able to verify those people with foreign addresses, it’s costly and difficult to do. When you look at MindGeek and how much traffic they deal with, you’re looking at millions and millions in costs. So, whether you’re a big player or a niche player, it’ll have financial implications. But, I can give you some comfort, because there’s a lot of solutions in the works to become compliant without having to spend money or verify anybody. There are things afoot to try and make that happen.
“The biggest problem is the consumer,” he delineated. “Assuming every site is compliant, you’ll get millions and millions who can’t see porn unless they’re forced to prove their age, and if you think about that, in reality, even if porn is a commodity, it’s porn, it’s the most sensitive stuff you can consume. Would you put any private data into this? Consumers don’t trust porn sites and I think the press, journalists around the world, are becoming more savvy about privacy and these issues. When it comes to the holding of data, there’s new regulations coming in, where if you are a porn company looking to hold data, if any of it gets released via hacking, the minimum penalty is millions of dollars. These are really challenging issues. I personally would never put any of my personal data on a site.”
Privacy is, indeed, a troublesome concern for Apsey, who remarked, “There’s a standard, a public access standard, so we brought experts from encryption and data processing to create that standard,” he said, describing efforts to protect user privacy. “We created a system where a gateway will verify someone’s age, in an anonymous environment, before sending it to a porn site. They don’t want a repeat of Ashley Madison, so we’re exchanging keys with different data sources, not one, to protect privacy. Where the challenge is going to be, is what the site is going to do. Ultimately, it’s going to be about speed. We can process people on their phone in seconds, but otherwise, if it takes 20 to 30 minutes, it’s not viable.”
Given the inevitability of the law and an entangling knot of privacy issues, Winyard advised, “What you have to realize is, we don’t get involved in the moral debate. It’s a law that’s going to happen. We have got no choice. We have to work with the fact that there’s going to be a law, and we have to work with the government. Even though these are solutions we can work with, ultimately anything can be hacked. Over the last 10 years, porn has become a commodity, worth 20 to 30 percent of internet revenue. That’s why there are more laws now. But balance is the key word. If they make the process of age verification too complicated, then the balance will be tipped to everyone adopting VPNs, with people driven to proxies, the dark web and such. So, the government is wary of that. Biometrics might one day be used, since there are about 20 different technologies in development.”
Cooke then explored other consequences of non-compliance with age verification laws. “Ancillary service providers are someone the government can’t tell to stop facilitating access, but it also includes search engines, so you might be delisted from Google and also, Twitter,” he cautioned. “Although Twitter wasn’t included in this bill, because it’s too difficult to control social media, if you’ve got an account promoting a site that involves pornography, then your account might be shut down. So, the scope might be bigger, catching more people in the regulatory net.
“The regulator, when they come up with a law, has a year or so to create the regulatory framework,” he explained. “There’s a lot more detail, even with the timing, because you’re going to send a fine out first. Oddly enough, U.K. sites that initially saw a hit to their site via traffic, saw it climb back up, because age verified people are more likely to purchase content. You have to realize children don’t have money, they’re a cost, so the industry wins if they verify. We’ve created age verification via third party approved systems. You can use that age verification system, or AVS, for other sites. The bill, as it stands, won’t approve certain AVS, but they’ll approve certain methodologies, so the bill doesn’t have to be updated every time there’s new tech.”
Henning detailed other privacy and age verification considerations. “People who hold sensitive jobs, pediatricians etc. are often concerned about how they can keep their identities private as a consumer of porn,” he said. “Since some kind of age verification system will be everywhere in the world in five years, we as an industry have a unique opportunity, where three nexus points converge in a way we can benefit from. By protecting kids and families, we have a unique opportunity in which everyone can win, but we need to have something that also works for everyone involved. If we don’t regulate ourselves, the government will do it for us. It used to be that basic age verification practices were accepted as good enough overall, but that didn’t fly in the U.K., and now this issue has momentum everywhere.”
Capping the panel, Leue detailed various difficulties adult entertainment companies will continue to face, as a favorite target of regulatory entities. “No other industry is regulated like the porn business,” he lamented. “We’re looking at human trafficking laws, which is a criminal activity we’re somehow being blamed for. We as the industry are the scapegoat for marriages failing, STIs, kids doing drugs, etc. and I think what we want to make clear, is we’re seeking to protect our industry from outside threats. And, there’s a difference between hiding in the corner and pretending it’s not going on, or deciding to proactively shape our own industry.
“As far as a third party AVS, my problem for that is now you’re paying for everybody that is potentially visiting that site, but if only 10 percent are buying subscriptions, you’re still paying for the other 90 percent,” Leue said. “The first amendment is how we fought 2257, limiting unwarranted inspections. I think that’s a very good point to look at. There’s also something to be said for unfair business practices for singling out one industry to enforce these laws. I stand with the rest of the industry in that we don’t want to turn this into a nanny state type of situation.
“The more we become a public, talked about industry, the more important it becomes for us to attend to this matter,” he concluded. “What Gary said earlier makes absolute sense. We are aware of the screws that financial institutions have on our industry. That’s another thing that the FSC as a trade association will deal with. We are a legal business. So, I think it’s important to talk to these guys after the panel, because all of these age verification issues will completely change our industry.”