According to recent reports, MindGeek, the company responsible for operating several leading adult entertainment websites, including Pornhub and YouPorn, has been acquired by Ethical Capital Partners, a Canadian private equity firm. The financial details of the acquisition remain undisclosed. The firm’s current executives will continue to manage the company alongside a team of ECP management that includes lawyers and former cannabis investors.
Despite being a leading brand in the industry, MindGeek has been under constant criticism for its inability to prevent illegal content from being uploaded or viewed on its platform, including child sexual abuse material. This has led to the company’s recent moderation issues, which came to a head in 2020 when both Visa and Mastercard suspended their services to Pornhub. As a result, the company removed most of its videos and introduced a mandatory age verification system for actors.
MindGeek has been facing a multitude of issues, including ongoing legal challenges that may lead to further pressure as US lawmakers attempt to lessen liability protections for websites under Section 230. This has resulted in payment processors continuing to deny access to its ad network, TrafficJunky, following a court ruling in California that Visa could potentially be held responsible for aiding MindGeek in monetizing child pornography.
In mid-2022, the CEO and COO of MindGeek, Feras Antoon and David Tassillo, respectively, both resigned from their positions. The challenges faced by MindGeek go beyond the difficulty of managing a large web platform in 2023.
Ethical Capital Partners (ECP), the firm that recently acquired MindGeek, has expressed its intentions to address the legal issues faced by the company. ECP has plans to invest in MindGeek as a leader in the fight against illegal online content, which may include using tools like AgeID, an age verification tool affiliated with MindGeek, or Safeguard, its image recognition tool that has been previously promoted for use on other adult sites.
Bruinen Investments, a company that emerged around the same time as Ethical Capital Partners, also emphasized its commitment to ethics on its website, promising to prioritize ethics and deliver safe and positive online experiences for adults. Notably, both firms feature Fady Mansour, a criminal defence lawyer, Derek Ogden, a former director of drug and organized crime enforcement for the Royal Canadian Mounted Police, and Sarah Bain, a communications consultant.
Given that these are the same individuals involved with MindGeek, it raises questions about their plans for the company. In a late 2021 investigation by The Logic, it was revealed that the previous plan for MindGeek involved a restructuring effort to “rehabilitate its reputation” with the goal of eventually selling or merging it with a SPAC. This strategy was known as Project Narsil, a reference to the broken sword in The Lord of the Rings and highlighted that the acquisition target is a highly recognized but undervalued brand in the adult entertainment and technology industry.
