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Adult services such as prostitution have followed their customers online, closely followed by law enforcement authorities.
In one case, authorities sought to charge the Craigslist site for promotion of prostitution, and sustained pressure from state attorneys general succeeded in getting the site to drop its adult services section. 28, 2012), United States District Judge Susan Illston dismissed some, but not all, of Infostream’s legal claims.
That kind of attention can be a concern not only for a dating site itself, but also for other online services that provide support to such sites, such as hosting companies and payment services. Sherman Act antitrust claims were dismissed (but with leave to file an amended complaint) because Infostream’s allegations that Pay Pal has an ownership interest in sites that compete with Infostream’s sites were deemed speculative.
So it’s not surprising that service providers seek to protect themselves contractually from the potential legal and business consequences of being associated with purveyors of shady, unsavory, or downright illegal services. Claims of common law fraud were dismissed (also with leave to amend), because Infostream did not adequately allege that it had detrimentally relied upon Pay Pal’s representations to it during the parties’ negotiations prior to the account termination.
Pay Pal, the preeminent online payment service, addresses the issue in its User Agreement and Acceptable Use Policy ( Just what falls into these prohibited categories can be the subject of dispute, however. But the court allowed Infostream’s breach of contract, breached of the implied covenant of good and fair dealing, and California state unfair competition law claims to stand, at least at this early stage of the litigation.