Asymmetric Content Moderation in Search Markets: The Case of Adult Websites

80 Pages Posted: 17 Mar 2025 Last revised: 18 Apr 2025 Date Written: February 01, 2025 Abstract We study the competitive impact of content moderation by a dominant online platform. We exploit an exogenous shock that led the largest adult content platform to remove all non-verified content, eliminating 80\% of its video library. Using a difference-in-differences approach and leveraging on daily website-country level traffic data, we find that this policy resulted in a 41% drop in traffic within one month, suggesting strong user preferences for the removed content. However, much of the displaced traffic was absorbed by competing platforms, including both mainstream rivals and less regulated fringe websites. Over six months, fringe sites experienced a 55% increase in visits, far outpacing the 10% growth of mainstream competitors. Search engines played a critical role in this reallocation: fringe platforms saw a surge in traffic from search referrals and aggregators, as users actively s ... Read full article.