What are the Legal Challenges Facing Adult Companies Today?

• 11 Dec, 2022
• Adult Site Broker

Nothing in this blog post should be construed as legal advice. We at Adult Site Broker, however, are in touch with the scope of risks associated with doing business in the adult entertainment industry. Much of this blog post derives from our extensive research and experience, and our support from our on-staff journalist who has post-graduate education in public policy and public administration. Plus, we are in close contact with many top adult industry attorneys.

Unfortunately, there are many legal and political risks that make running an adult website or a firm that owns adult properties more challenging than it has to be. Especially in the United States, there is a renewed moral panic related to the status of the adult entertainment industries propagated by left- and right-wing anti-porn activists who see this type of business as harmful. By no means is our industry perfect, but it is one of the highest revenue-generating niche entertainment businesses in the world. Not to mention, adult entertainment has served as a harbinger of internet innovations. 

In all respects, while not the best-looking industry in optics, it is still a regulated and professional set of enterprises that care about corporate ethics, social responsibility, free speech, and culture. This blog post discusses some of the legal challenges for adult companies, as our team sees them.

What Are Some of the Legal Issues Facing the Adult Industry?

As mentioned, adult industry companies face a variety of legal issues that could impact how the firm’s work and operations are conducted. To begin with the obvious, the legal issue that all firms that produce and distribute pornographic content must comply with is 18 U.S. Code § 2257 (2257) record keeping.

A Reminder About 2257 Compliance 

2257 compliance has been covered in another blog post we published recently. Nonetheless, it is important to remind our readers – especially new entrepreneurs looking to purchase a property from us – how crucial this law is. 2257 record keeping is a requirement by federal criminal law and the U.S. Department of Justice for all producers of pornographic, nudity, and content of a sexual nature. 2257 record keeping includes required age verification, identity, and performance consent.

All records are held by a custodian of records – typically a chief compliance officer or a general counsel – and should be retained for process and audit by a representative of the federal Justice Department at any time. All studios, porn sites that produce original content, photographers, and porn producers (among others) must retain all age verification and identity documents for safety.

Civil Litigation Trends

There have been trends in litigation and legislation suggesting that lawyers are looking to cash in on the moral panic surrounding porn by cashing in through a tort liability framework alleging harm in one capacity or another. For example, some state legislatures have adopted laws that enable a set of civil liabilities to be thrown against adult entertainment companies for perceived civil harm. 

XBIZ reports that conservative Lousiana Gov. John Bel Edwards signed into law House Bill 142, a law that creates civil liability for “sex addiction” and “online pornography.” House Bill 142 provides “civil remedies for parents of minors exposed to online pornography or other explicit material if websites do not have reasonable [age] verification procedures in place” to limit access for minors.

Clashing State and Federal Laws

Other states have seen these types of laws presented, but most of these proposals have run aground and failed because of the arbitrary nature of these laws. Unfortunately, there are just a few states that have these laws – including Louisiana – which creates another wild-west patchwork of non-uniformed laws in dealing with perceived online harms alleged by parents of minors. Based on this context, Section 230  of the Communications Decency Act of 1996 would supersede state laws. 

This is due to the supremacy of federal law, and Section 230 itself maintains the liability safe harbor for most web platforms. Web platforms, under this standard, are technically legally immunized from the liabilities incurred based on the content that is published to adult sites by third-party users. On this basis, federal and state laws will clash, placing unwarranted liabilities and risks on companies.

FOSTA-SESTA

Another legal challenge for adult entertainment industry companies is FOSTA-SESTA. We have written about Section 230 and its relationship with the controversial anti-trafficking law recently. 

In that blog post, we point out that FOSTA-SESTA not only guts Section 230 protections, but it has also caused more harm than good based on its track record of convictions and use against those who allegedly violated such provisions. The Department of Justice has reported very few convictions under the law, with enforcement related to FOSTA-SESTA proving to be very, very disproportionate. 

One case is the Backpage.com trial. The Backpage case is plagued with bias, external and internal influence, and alleged malpractice by prosecutors in a notoriously conservative federal district court down in Arizona. Though Backpage.com ownership declares their innocence in a case that accuses them of engaging in pervasive and widespread human trafficking, the prosecution has done very little to prove an actual involvement in such activities, aside from simply running the business. Backpage.com, for those who need a reminder, was a Craigslist-style classified website that was very popular among sex workers who simply advertised their services on the internet.

FOSTA-SESTA has been used to further accuse adult entertainment industry companies of crimes that they didn’t commit. In fact, FOSTA-SESTA is a product of campaigning and advocacy by many anti-porn organizations, including NCOSE, and the activism of GOP President Donald Trump and his far-right and socially conservative allies. Despite it becoming law, there is substantial and growing evidence that FOSTA-SESTA has not only limited free speech on the internet but has harmed sex workers and their abilities to advertise and communicate through the relative safety and security of the internet. Currently, FOSTA-SESTA remains on the books. But there is a proposal in Congress that would direct the federal government to study the impact of FOSTA-SESTA from the positions of criminal justice, economics, and socio-cultural. This proposal remains untouched, unfortunately.

Intellectual Property

Intellectual property remains an important legal issue for the adult entertainment industry. Adult Site Broker’s team has written on IP rights and content piracy. But this is a very real issue. One of the important laws governing intellectual property protection in the adult industry is the Digital Millennium Copyright Act. While we have written on DMCA and IP already, we are going to just issue a quick reminder. DMCA is used to protect against adult content piracy. All the major entertainment industries utilize DMCA as mitigation measures to protect their proprietary content.

Should I Retain a Lawyer?

We can go on and on about the legal issues facing the adult entertainment industry. However, the question you likely have is this: Should I retain a lawyer for my company? The short answer is yes. A lawyer who specializes in digital free speech, intellectual property, and criminal defense can go a very long way in helping adult site owners and operators. Adult Site Broker recently listed the very best adult industry attorneys for hire. You can check out that list here. 

We at Adult Site Broker hope you’ve enjoyed this post. Please reach out to us if you have any questions.