Paypal is Widening the Racial Wealth Gap with Discriminatory Practices Against Sex Workers
By: Maggie Clancy
Tags: PayPal, Sex Work, Fostasesta, Sex Trafficking, Analysis

Analysis

Paypal is Widening the Racial Wealth Gap with Discriminatory Practices Against Sex Workers

To some, the idea of “sex work” may conjure up a pejorative caricature of a scantily-clad woman partaking in illegal activities. Obviously, this is a harmful stereotype, which more and more people are coming to realize as they support the decriminalization of sex work.

For the uninitiated, “sex work” can refer to consensual in-person services, which is generally outlawed in the United States, save for smaller towns in Nevada. It can also refer to legal, consensual sex work, like adult cam sites, adult pornography, erotic literature and photography, and social media subscription services. To some, this might be obvious, but other aspects of sex work are not.

What many people don’t picture sex workers as are activists who have battled for the rights of women, workers, BIPOC, and other historically oppressed groups for millennia. In Ancient Greece, Hetairai, or courtesans, accompanied men to academic symposiums and spread their gained knowledge to poorly educated women and girls. In 1969, Marsha P. Johnson and Sylvia Rivera, two trans women of color, led the charge at the Stonewall Uprising and used money earned from sex work to house trans youth experiencing homelessness. Sex workers quickly joined the fight against HIV and AIDS and the homophobic stigma that came with it.

Sex workers are still foundational voices in the activist landscape, especially when it comes to technology. The internet has provided adult performers with not only legal avenues to build their own businesses, but also with spaces to vet potential clients. Online whisper networks, for instance, allow sex workers to warn each other about questionable johns.

Adult camming and content sites have seen record creator signups as COVID-19 forces the reported 27 million unemployed Americans to find innovative, safe ways to make ends meet as the federal and state governments continue to fail them. Sites like OnlyFans have seen massive increases in creator signups and have earned shoutouts from Beyoncé. At the end of March 2020, Forbes reported that the paywalled site racked up 150,000 new users every 24 hours.

But sites like OnlyFans take a 20 to 60 percent cut of the creator’s income. Sex workers through the platform are considered independent contractors, so creators also have to put upwards of 20 percent away for taxes. Many adult sites are the target of hacks, and virtual sex workers worry about their paywalled content getting leaked.

Many sex workers turn to payment methods and platforms that don’t take a huge chunk of their income or are prone to content leaks. Unfortunately, even when adult performers are working in the legal parameters of sex work, they still have to navigate the informal economy with caution. Banks and financial tech companies have found arbitrary reasons to shut down sex workers’ accounts, hold their money for extended amounts of time, and, in most cases, never give the money back to the performer, sometimes up to thousands of dollars.

One of the companies most notorious for discriminating against and stealing from sex workers is PayPal. Most often, PayPal’s sex work discrimination practice especially hurts racial and gender minorities, along with other disadvantaged groups.

On June 11, 2020, PayPal announced their “$530 million commitment” to “close the racial wealth gap that sustains this profound inequity.” They have a Giving Fund where users can suggest where they would like to donate money (although PayPal has final word of where said funds go). If PayPal is truly committed to closing the racial wealth gap, they would end their discriminatory practices against sex workers.

PayPal’s Sordid Past with Sex Workers

PayPal isn’t new to the game of othering and harming sex workers. Since about 2005, PayPal — along with other fin-tech and banking giants JP Morgan Chase and Visa/MasterCard — have not only abruptly frozen and closed sex workers’ accounts while pocketing the cash, but have supported legislation that further stigmatizes sex work and makes it even more dangerous.

PayPal’s Terms and Conditions surrounding sexual content is archaic. The payment processor allows physical items, permitting “certain sexually oriented physical goods, such as videos, DVDs, magazines, or other products physically delivered to the customer,” within the US. The Terms of Service do not go into detail about which “certain” items are okay and which ones will be flagged.

And PayPal outright bans any sort of digital sales, an action that shows PayPal is not taking conducive steps to closing the wealth gap. Many sex workers, especially virtual and online sex workers, enter the business because of the low startup costs. All you need is a camera phone and access to the internet to create legal adult content.

But PayPal’s rules create a cost-barrier — not everyone has the equipment or funds to create DVDs or pay shipping costs, which add up quickly. Since banks like Chase have shut down sex workers’ accounts, sex workers are hesitant to register as a business entity, which could afford them tax breaks. The Terms of Service effectively ban sex workers from using the platform in any digital capacity. Also, it’s 2020, who the hell is ordering porn DVDs?

PayPal continued their crusade against sex workers in November 2019 when they announced they would no longer be approving payment through PornHub. The adult site offered models other ways to receive payment, saying, “We are all devastated by PayPal’s decision to stop payouts to over a hundred thousand performers who rely on them for their livelihoods.”

The FOSTA-SESTA Fiasco

In Spring 2018, the House passed the Fight Online Sex Trafficking Act (FOSTA), and the Senate passed the Stop Enabling Sex Traffickers Act (SESTA). Both bills received enthusiastic support across the political spectrum.

On paper, these both sound like appropriate, preventative laws, considering the alarming rise in cases of human trafficking in the United States.

But when you really take a look at both bills parse the legalese out, it’s easy to see why sex workers, victims of sex trafficking, and organizations like Human Rights Watch vocally opposed the bill. Even though the people who the bills are purportedly trying to protect actively protested and voiced their concerns, lawmakers did not take their very valid worries into consideration.

FOSTA-SESTA pokes a gaping hole in Section 230 of the 1996 Communications Decency Act. Considered one of the most important pieces of internet legislation, it is commonly referred to as the “safe harbor” law; the rule frees internet platforms from being held liable for their users’ posts. And it makes sense — it would be difficult for websites like Twitter or Reddit to monitor every post from their millions of users.

The FOSTA-SESTA bills introduced a stipulation to Section 230. Internet providers are now held responsible for ads or content related to or selling sex work, even for legal forms of sex work. This stipulation to Section 230 conflates consensual sex work with human trafficking by design. Like the War on Drugs and the “Tough on Crime” playbook, conflating human trafficking and sex work is just another way to criminalize poverty.

The bills’ passing shut down a lot of spaces sex workers used to stay safe and find work. Craigslist shut down their personals page after the site grew nervous they would be held liable for sex trafficking or criminalized behavior. Other sites quickly followed Craigslist’s lead.

But many sex workers used the personals page to meet and screen clients. By verifying clients’ information from the safety of their homes, sex workers have a better chance of weeding out dangerous johns. The personals page, one study suggests, helped decrease the homicide rate of women from 10 to 17 percent in the US.

These websites helped keep sex workers safe from the very violence and abuse FOSTA-SESTA is trying to prevent. Former victims of sex trafficking also believe that FOSTA-SESTA will simply push human trafficking deeper into the dark web, making it even more difficult to combat. There is no evidence these laws have done anything to reduce sex trafficking. In fact, cities like San Francisco have reported an 170 percent increase in human trafficking investigations after the bill passed.

But guess who supported these bills? An alliance of tech giants called the Internet Association, which includes PayPal and other online businesses notorious for discriminating against sex workers. The Internet Association supported FOSTA-SESTA whole-heartedly, saying:

“Internet Association is committed to combating sexual exploitation and sex trafficking online and supports SESTA. Important changes made to SESTA will grant victims the ability to secure the justice they deserve, allow internet platforms to continue their work combating human trafficking, and protect good actors in the ecosystem.”

But as emerging data continues to show, this bill has not proved effective in reducing human sex trafficking. Instead, it eliminated important protections for sex workers.

The Internet Association’s Fumble With The EARN IT Bill

Even though data suggests FOSTA-SESTA is not only wildly ineffective but also actively harmful, Senator Lindsey Graham sponsored the Eliminating Abusive and Rampant Neglect of Interactive Technologies Act of 2020, or the EARN IT Act of 2020. Like FOSTA-SESTA, this bill has garnered bipartisanship, with cosponsors on both sides of the aisle. Also like FOSTA-SESTA, sex workers and victims of trafficking and sexual abuse vehemently opposed the bill for the same reasons.

EARN IT further weakens protection under Section 230. When the bill was first conceived, an unelected 19-member committee, headed by General Attorney William Barr and rounded out with law enforcement officials, would determine new laws — as opposed to actual victims of trafficking or sex workers. This committee would then be able to dictate a set of “best practices” for tech companies to prevent human trafficking, the distribution of Child Sexual Abuse Material (CSAM), and the actual crimes against children depicted in said material. If tech companies don’t comply with these best practices, they become liable and are open to civil lawsuits for their users’ content. These companies would have to remove anything that could have legal ramifications from their sites, threatening freedom of speech.

One of these “best practices” is likely to include the ban end-to-end encryption. AG Barr has repeatedly voiced his desire for encryption softwares to allow “backdoors” to law enforcement, or workarounds so they could scan any and all messages. This isn’t just alarming for the sake of privacy, though; as long as law enforcement says they are acting to stop crimes against children, they are free to view whatever they please, from Facebook messages to emails to texts. It is yet another tool for police and law enforcement to abuse sex workers, as they have done throughout their entire history.

Although big tech voiced their obvious concerns about this bill, cosponsors introduced an amendment that could make the law even more dangerous. Instead of a 19-person federal committee deciding how the internet should be regulated, state lawmakers are the ones with power. This can be a death sentence for sex workers, especially BIPOC and LGBTQA+ sex workers in red states.

“EARN IT Act replaces one set of problems with another by opening the door to an unpredictable and inconsistent set of standards under state laws that pose many of the same risks to strong encryption,” said Mike Lemon, senior director and federal government affairs counsel for the Internet Association. Yes, PayPal is part of the Internet Association, but big tech is more worried about hackers accessing backdoors meant for law enforcement and censorship, not the sex workers who would be harmed by EARN IT. In fact, the only thing the bill really does is censor CSAM and make it more difficult to find human traffickers and child abusers. It does anything but put an end to their heinous crimes.

Time for PayPal to Pony Up

PayPal and its subsidiaries, including Venmo, have actively discriminated against sex workers, acting as another oppressive force widening the wealth inequality gap. If the company truly wants to work towards closing “the racial wealth gap that sustains this profound inequity,” they wouldn’t engage in discriminatory policing of sex work on their platforms. Giant financial institutions like PayPal shouldn’t be the reason a sex worker running a small business is afraid or unable to apply for a Small Business Loan due to COVID-19 — or ever.

So PayPal, as your cheeky ads for Venmo say, it’s time to pony up and do your part to close the racial wealth gap like you promised. We challenge you to make a generous donation to the Emergency Relief Fund established by the Los Angeles Chapter of Sex Workers Outreach Projects (SWOP LA). Oppose EARN IT in its entirety, and invite sex workers and victims of abuse to lead the law-making process. Change your whorephobic policies, stop closing sex workers’ accounts, and give back the funds you stole from them.

For readers who also want to participate in direct action to help sex workers and stop EARN IT, here’s what you can do:

Go to the Election Frontier Foundation’s (EFF) Action Center and contact your representatives. The site helps you determine which reps to contact and even provides a script (although we suggest altering the language a bit to keep your message from going to your reps’ spam folders. It takes 30 seconds, we promise).

Continue to educate yourself and others about the intersection of technology and social justice. Hacking//Hustling, a collective of sex worker and ally activists, has wonderful resources.

Donate to your local sex work union or sex worker emergency relief fund. Point Source Youth has a growing list of organizations to help sex workers financially affected by COVID-19.

Pay for your porn.

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