Content Moderation Shockwaves: How Adult Site Policy Reshaped Online Competition

A study reveals the profound impact of content moderation policies on online competition, focusing on the adult content market. When a dominant platform removed 80% of unverified content, its traffic plummeted by 41%. However, this displaced traffic shifted to competitors, both mainstream and less-regulated fringe sites. Fringe sites saw a remarkable 55% increase in visits, significantly outpacing the 10% growth of mainstream rivals. Search engines played a crucial role, directing users seeking alternatives. The leading platform responded aggressively, using DMCA takedowns to remove competitors from search results. The study highlights how asymmetric content moderation shocks reshape market dynamics, driving users towards less-regulated spaces and altering substitution patterns.