Backpage Shows Federal Power on Internet Regulation

by: The Knowledge Group

April 17, 2018

Share: became the latest in the library of websites shut down by the federal government complete with the notorious takeover of the site and ominous labels on the destination address detailing federal takeover of electronic assets. Most folks shrug when they read these stories, assuming the website owners were probably up to no good and finally got caught red-handed. However, the deeper issue behind Backpage’s takedown for illegal prostitution activity involves what the federal government needs to get involved as well as what minimum thresholds need to be met for the feds to take over other sites as well with little warning.

The gossip chatter among pundits was that Backpage put itself over the red line allowing sex traffic ads involving child prostitution or code words for the same. However, what probably gets the feds attention much faster is the amount of financial movement that occurs on such sites. In the case of Backpage, advertising revenue skyrocketed from a notable $5.3 million in 2008 to as much as $135 million by 2014. From a tax interest along, that size of income raises eyebrows in government. Throw in the fact that the revenue predominantly comes from sex traffic advertising, and the prurient risk involving tax income and interstate commerce create an open barn door for the feds to walk through with an investigation.

The decision to be made by the courts is whether sites like Backpage, where users post the actual information and the site is just an intermediary, was actively involved in the related criminal activity. Arguments can be made under that federal Communications Decency Act that no such link can be automatically assumed. However, other federal laws and the proposed Allow States and Victims to Fight Online Sex Trafficking Act to be sent to the President make the connection of allegations much easier.

More than likely the federal prosecution will use a shotgun approach with tax violations, intercommerce violations, prostitution involvement and conspiracy and racketeering. Any can drain a defense badly and multi-attack just about ensures prison time for the charged and shut down of a site. As a result, this strategy will continue to be used in the future and websites owners are best served by taking Craiglist’s approach – wiping out hosted adult ads altogether.

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