LOS ANGELES—Aylo, the parent company of Pornhub.com, was able to secure an agreement last week with the state of Utah preventing the enforcement of a law that prohibits the use of virtual private networks to circumvent the state's age verification statute. Enforcement now begins September 3, according to court documents.
Aylo sued the Utah Division of Consumer Protection and the state's Department of Commerce in late April in the U.S. District Court for the District of Utah, alleging constitutional violations, including accusations that the state is violating the interstate commerce and foreign commerce clauses of the U.S. Constitution.
The lawsuit also makes allegations of "unlawful state extraterritorial regulation." Aylo Freesites Ltd. and Aylo Group Ltd. are foreign corporate entities owned by Aylo's network of shell companies that are headquartered in Montreal, Québec, and are further held by the ownership group Ethical Capital Partners, based in Ottawa, Ontario.
"This new law is unconstitutional for three independent reasons: it constitutes impermissible extraterritorial legislation, it violates the dormant Commerce Clause, and it also violates the Foreign Commerce Clause by interfering with purely international transactions involving foreign entities and foreign nationals," argue attorneys representing the plaintiffs.
The plaintiff's attorneys include Annika L. Jones and Brandon S. Fuller, a partner and associate, respectively, at the Salt Lake City office of Snell & Wilmer LLP.
Aylo also has a team from the Washington, D.C. office of Jenner & Block LLP. That includes D.C. managing partner Lindsay Harrison, partner Jessica Ring Amunson, and special counsel Daniel Schwei. Attorneys representing the state of Utah were able to reach an agreement with Aylo's counsel, as noted above, to delay enforcement of the VPN ban.
As AVN previously reported, Utah Gov. Spencer Cox signed into law Senate Bill (SB) 73, which levies a 2 percent excise tax on all adult content purchased in the state's digital space. But built into the law was a civil prohibition on users utilizing VPNs and other IP-masking technology to circumvent age verification requirements and site-level content blocks.
When Utah lawmakers adopted age verification at the site level in 2023, Aylo took the step to geoblock the entire digital space out of protest. Further, it has been proven time and again that age verification laws are ultimately rendered useless given the commercial availability of virtual private network platforms in app marketplaces like Google Play.
To close this regulatory loophole, lawmakers introduced SB 73 and managed to advance it through the Republican-held state legislature with very little conflict.
As AVN reported, the law notes, "[An] individual is considered to be accessing the website from this state if the individual is actually located in the state, regardless of whether the individual is using a virtual private network, proxy server, or other means to disguise or misrepresenting the individual's geographic location to make it appear that the individual is accessing a website from a location outside this state." The law attempts to prohibit the publication of information advocating for the use of VPNs to beat age checks.
Enforcement of the VPN provision was expected to enter force today, but the agreement now dictates that enforcement will be held until the previously noted date of September 3. The 2 percent excise tax takes effect in October.
"[The] defendants shall not take enforcement action or otherwise seek to impose liability pursuant to [the bill] for any conduct by plaintiffs or their affiliates that occurs during the period of forbearance," states a memo filed with the court. The memo was signed by Aylo attorneys and the two representing the office of the Utah Attorney General Derek Brown.
"During that period, Plaintiffs and their affiliates shall also not change any of their current geofencing practices in Utah," the memo adds, indicating litigation shall play out with no changes to enforcement and business conduct on the part of Aylo.
Lawrence Walters, an attorney specializing in adult entertainment industry litigation, called this move "smart."
"The state was smart to agree to forego enforcement of this ill-considered law pending review by the courts," Walters told AVN.
He added, "The expectation to identify the location of users who access a website through a VPN is an impossibility. The law is extremely vulnerable to constitutional challenges, and the state could be on the hook for significant damages and attorneys' fees, particularly if it moved forward with enforcement proceedings."
Central to Aylo's lawsuit is the assertion that SB 73 will cause irreparable harm to its businesses and the overall access to marketized privacy-preserving technology.
"There is no feasible way for a company like Aylo to reliably verify whether any particular individual is using a VPN, proxy server, or other location-masking technology—and therefore no way to determine whether a user who appears to be located outside Utah is, in fact, located inside Utah," said a spokesperson for Aylo.
There is additionally a lack of standing.
The spokesperson added, "Utah is projecting its policy choices onto conduct occurring entirely outside its borders, in states and countries that have made different legislative judgments. ... It is our opinion that this new law is unconstitutional and that no single state has constitutional authority to set the terms under which a global company may operate on the global Internet."
Adult industry attorney Corey Silverstein told AVN that there is a much larger concern to consider.
"Aylo’s lawsuit underscores the growing constitutional collision between online age-verification mandates and digital privacy rights," Silverstein said. "While lawmakers frame these laws as child-protection measures, the practical effect is forcing adults to surrender sensitive personal information to access legal content online.
