REUTERS/Richard Brian
- Bill Ackman helped to pressure Pornhub into purging unauthorized videos.
- Ackman texted then-Mastercard CEO Ajay Banga about the issue, Institutional Investor reported.
- Mastercard and Visa swiftly cut ties with Pornhub, and the site deleted 80% of its videos.
- See more stories on Insider's business page.
Billionaire investor Bill Ackman helped to pressure Pornhub into removing millions of unauthorized videos from its website, Institutional Investor reported this week.
The Pershing Square Capital Management boss was browsing Twitter last December when he came across "The Children of Pornhub," a damning indictment of the porn site by The New York Times columnist Nicholas Kristof. The article detailed how Pornhub allowed unverified users to upload videos without authorization from the people featured in them, enabling revenge porn and other exploitation.
Ackman noted in Kristof's story that Mastercard and Visa processed payments for Pornhub. The hedge fund manager, who has waged activist-shareholder campaigns against several companies, realized he could leverage his influence to push those publicly listed payment groups to make changes.
Unaware that American Express already banned payments on porn sites, he texted Mastercard CEO Ajay Banga a link to the story and the following message: "Amex, VISA and MasterCard should immediately withhold payments or withdraw until this is fixed. PayPal has already done so."
Banga swiftly replied, "We're on it," according to Institutional Investor.
Days later, Mastercard announced it had instructed its partners who connected Pornhub to its payment network to cease accepting the site's charges. The payments group had found evidence of illegal activity and was continuing its investigation, it said.
Visa promptly cut ties with Pornhub too and launched an investigation. The porn site declared less than 24 hours later that it had removed 10 million videos, or 80% of all the videos on its site.
MindGeek didn't immediately respond to a request for comment from Insider.
Pornhub-owner MindGeek was already under pressure from human rights activists such as Laila Mickelwait, while litigator Michael Bowe was signaling to the credit-card companies that lawsuits might be on the way, Institutional Investor said.
However, Ackman's text to Banga and his tweets about the issue may have tipped the balance. "It wasn't until Bill really laid on the pressure and said, 'Do the right thing,' that they did," Mickelwait told the publication.
The billionaire's key takeaway from the episode was that investors can influence companies to act more responsibly, especially now that environmental, social, and governance (ESG) standards are gaining momentum. "CEOs get a zillion emails, but the one group that rises to the top of the line ... is its biggest shareholders, influential shareholders," he told Institutional Investor.
"A tweet can move the needle," he added.