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Backpage CEO arrested in child trafficking probe: Why the controversy?

Carl Ferrer, the chief executive officer of Backpage, was arrested on Thursday on the charge of facilitating the sex trafficking of minors. It's part of a multi-year investigation that has pitted child welfare advocates against proponents of free speech.

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Carl Ferrer, shown here in his driver's license photo, was arrested on Thursday on criminal charges including pimping, as authorities investigate his website Backpage.com, which has been accused of facilitating sex trafficking of minors.

Texas Attorney General’s Office/Reuters

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An ongoing child trafficking investigation against the classified ad website Backpage moved forward Thursday.

Carl Ferrer, the company's chief executive, was arrested in Houston on a California warrant. The arrest is the latest in a three-year investigation – involving undercover operations – by the California attorney general's office.

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The case against Backpage has been part of a tug-of-war between child welfare groups and advocates of free speech. According to the National Center for Missing & Exploited Children, up to 71 percent of suspected child trafficking reports involved Backpage, giving it a central role in efforts to curb trafficking. But the company claims First Amendment protection for the ads it publishes.

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In 2010, Ernie Allen, then-president of the National Center for Missing & Exploited Children, told the House Judiciary Committee that at least 100,000 minors are trafficked annually. If these ads were not published, it would be harder to funnel children into sex trafficking, he said.

"The goal is to make it riskier, less profitable and more difficult – to destroy the business model for those who sell children for sex," he underlined in his testimony.

The charges are the latest in a string of litigation efforts against the company. The company argues that its actions are not illegal – and should not be limited – on the basis of free speech. They point to the Communications Decency Act of 1996, which includes a provision that states providers of computer services cannot be treated as the publisher of that content. Because Backpage does not produce the ads itself, the company claims that the free speech protection should apply.

In March, the Senate voted 96 to 0 to pursue civil contempt charges for Backpage, after Ferrer refused to appear at a November 2015 hearing and turn over business documents the Senate’s Permanent Subcommittee on Investigations had requested. A report from the subcommittee alleges that Backpage is involved in editing ad content to cover up illegality.

The subcommittee aimed to "understand how lawmakers, law enforcement, and even private businesses can more effectively combat this serious crime that thrives on an online black market," Chairman Sen. Rob Portman (R) of Ohio told Congress.

Over Backpage's objections, a Washington state law now requires sites to verify advertisers' age, a provision that the company claimed violated free speech and the Communications Decency Act of 1996. 

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But a Massachusetts child trafficking case involving the company was dismissed earlier this year, when federal appeals court ruled that free speech, as laid out in the Communications Decency Act, came first.

Criminal charges have also been made against Michael Lacey and James Larkin, the controlling shareholders of Backpage, the California attorney general’s office said. Neither of the two is in custody.

Other companies have shut down "adult services" sites in response to pressure from child advocacy groups. Craigslist closed that portion of its site in 2010 but warned that doing so could make the problem worse, since it pushes traffickers to less-regulated sites where their activity is harder to track.

Material from Reuters contributed to this report.