This month, all the major credit card companies - MasterCard, Visa, American Express - announced they would stop processing payments to websites that collect mug shots and publish them online. These sites make their money by charging people a fee to remove these embarrassing photos from the Net. Critics call it extortion, and the card companies announced they want no part of it.

Whatever you might think of these sites and their business model, it's a story that demonstrates how credit card companies sometimes act as the cops and regulators of online commerce and expression, as NPR's Steve Henn reports.

STEVE HENN, BYLINE: Jamie Chandler says the thing about credit companies is, they carefully cultivate and protect their brands, often marketing themselves aggressively to minority groups.

JAMIE CHANDLER: For example, MasterCard purchased promoted tweets in June, in celebration of the DOMA ruling.

HENN: That's the Supreme Court case that found same-sex couples were entitled to federal benefits. And niche marketing like this is common. Credit card companies have also invested heavily in creating and marketing products that work for observant Muslims. But at the same time, Chandler, who's a political scientist at Hunter College, says these companies sometimes end up in a kind of business partnership with hate groups. You see, they make money from every transaction they process. So if, say, MasterCard processes a donation to a hate group, it profits from that.

CHANDLER: There's an inherent contradiction there because you're generating a perception that you're a diversity-promoting organization.

HENN: But...

CHANDLER: For example, if you go to the International Conspiratological website, the credit card acceptance icons are directly over a graphic that says: White pride worldwide.

HENN: Or, at least, they used to. Chandler, working with a state legislator in New York, approached MasterCard.

CHANDLER: And they have decided to drop the eight Holocaust-denial organizations that we identified, from the emergent network.

HENN: Including the International Conspiratological Association. That means right now, that group can't really do business online. To buy a T-shirt, you'd have to mail them a check. And Chandler says this is just the start. He's identified more than 40 groups he'd like card companies to stop doing business with.

CHANDLER: And I've had conversations with MasterCard, and the next step is to expand that to the anti-gay, Islamophobic and xenophobic organizations that we identified.

HENN: One of the groups on Chandler's list of targets is the Family Research Council because of its opposition to same-sex marriage and gay rights. But the Family Research Council is a major force in mainstream conservative politics. Rainey Reitman, at the Electronic Frontier Foundation, says efforts like Chandler's are becoming more common; and they're coming from across the political spectrum.

RAINEY REITMAN: I have noticed a serious trend towards what we often call the weakest link of taking down free speech, which is putting pressure on payment providers to suspend the accounts of controversial websites in order to basically, shut the website down.

HENN: Chandler argues this isn't a free-speech issue. He says companies like MasterCard, Visa and Amex have the right to decide who they do business with, and he is simply pressuring them to live up to their own policies on diversity and inclusion. Other groups are asking card companies to stop processing payments to mail-order-bride businesses.

Rainey Reitman says publishers of websites that feature controversial erotic literature or feminist pornography have had their ability to accept credit cards just ripped away. John Muller is a vice president at PayPal.

JOHN MULLER: Our philosophy is to make it easy for anyone to make or to accept payment.

HENN: He says firms like his that make it easier for small businesses, and even individuals, to accept credit card payments are often caught in the middle. They have to comply with a web of state and federal regulation; and they depend on payment networks owned by the big card companies, to clear transactions.

MULLER: So we certainly have to respect their interests and their rules as well.

REITMAN: Ultimately, Visa and MasterCard are the ones with the problematic policies.

HENN: Rainey Reitman.

REITMAN: They've got vague policies. Payment card providers like PayPal don't know how to interpret them, and they're shutting down sites that aren't even violating the First Amendment - legal sites with legal content.

HENN: I wanted to ask MasterCard and Visa how they made decisions like these. Why, for example, did MasterCard decide to flag Holocaust deniers, but continues to facilitate payments for a group that advocates the death penalty for homosexuals? But the company's officials declined to talk on tape, saying all credit card companies face the same challenges. They said they're required by law to block illegal commerce, and they noted they reserve the right to penalize anyone on their network who facilitates transactions that could reflect negatively on their brand.

Steve Henn, NPR News, Silicon Valley.


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