Craigslist Censors Its 'Adult Services' Listings: Refunds on the Way?

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Craigslist has censored its adult-services listings after several state attorney generals asked it to move remove them.Sex sells, censorship doesn't. That's what Craigslist is learning after it blocked access to its controversial "adult services" listings late last week.

The move came two weeks after attorneys general from 17 states called on the online classified ads giant to yank the racy listings from its site. The online classified ads giant, instead, plastered a black and white "censored" sign over its "adult services" listing and blocked access to the listings.

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And now, according to legal experts, Craigslist is likely on the hook to refund the money back to all those folks who paid $10 a pop to post their racy advertisements or $5 each for a re-posting, according to its terms-of-use agreement.

Refunds Coming?

Under the agreement, fees are not refunded if an ad is removed for violating the terms of use. In this particular case, however, Craigslist hasn't said it has deemed the ads to be in violation of its terms of use, nor has it removed them. Instead, it has blocked access to those listings, which has the same effect as if it had removed them.

"It'll be hard for them to keep the money," says Laurence Pulgram, an attorney with Fenwick & West. Last year, Craigslist pulled in an estimated $100 million in revenues for its entire site, including adult-services listings.

Even though there are usually some limitations on when services like Craigslist are required to issue refunds, advertisers generally get a refund if an ad doesn't run, says Damon Dunn, an attorney with Funkhouser, Vegosen, Liebman & Dunn.

Craigslist was not immediately available for comment and has not said why it decided to post a censored sign on the adult-services listings instead of removing them all together.

Advantages of Censorship

But while Craigslist's strategy may cut it out of a tidy sum of revenues, attorneys say the censorship block gives it two principal advantages: It allows Craigslist to protest the demands of the attorneys generals and buys them more time to consider their options.

Rather than remove all the "adult services" listings, Craigslist is putting them on ice until it determines whether it needs to remove them permanently, revise the way it handles them, or come to some middle ground with the states' enforcement cops.

The move marks the second time its responded to pressure from law enforcement over the red light district on its site. Last year, the online classifieds titan did away with its "erotic services" listings, but installed "adult services" in their place. Craigslist began charging for the listings and said it planned to closely monitor them.

In a joint-letter signed last month by attorneys generals from 17 states, the multi-state task force had this to say about the adult-services monitoring:
Your much-touted "manual review" of the Adult Services ads has failed to yield any discernible reduction in obvious solicitations. We recognize that Craigslist may lose the considerable revenue generated by the Adult Services ads. No amount of money can justify the scourge of illegal prostitution, and the suffering of the woman and children who will continue to be victimized, in the market and trafficking provided by Craigslist.
Censorship Wins Approval from AGs

A week before the attorneys general sent their joint-letter last month, Craigslist CEO Jim Buckmaster noted in a blog post that Craigslist manually reviews each ad in the "adult services" listings by an attorney trained to enforce Craigslist posting guidelines. He added that the guidelines are more rigorous than those commonly found in newspapers and yellow pages and resulted in more than 700,000 ads being rejected.

Despite the changes in how it handles sex-related listings in the U.S., the privately held company continues to use its "exotic services" label in other countries, including Canada. In Canada, Craigslist also posts no warnings that the exotic services postings will be manually screened, leaving one to assume it isn't happening there.

Nonetheless, Buckmaster, who chided other companies for not taking similar steps in monitoring their sites for prostitution and trafficking of children, said in his blog that Craigslist "is committed to being socially responsible, and when it comes to adult services ads, that includes aggressively combating violent crime and human rights violations, including human trafficking and the exploitation of minors."

The attorneys general apparently applauded the move by Craigslist to censor its adult services. According to a report in the Chicago Blog Network, Cara Smith, deputy chief to the Illinois' attorney general, said she appreciated the steps Craigslist has taken.
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