From AO3 website faq:
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Question 3:
Do you have any other restrictions on what stories you accept?
Answer:
I no longer accept stories involving characters under the age of 18 in sexual situations. The characters must be unambiguously over 18, and I will be interpreting what constitutes “sexual situations” quite liberally.
Because of legal threats I have received in the past, I am no longer accepting any fan fiction. The fan fiction that is already in the archive will remain for now; I may decide to delete it at a later time.
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Now, that policy is one thing and reality is another. I know full well that underaged stuff is still being added to. Perhaps not new stories? Not sure.
The other is something that they hide behind: non-profit status. This is from their news section:
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The tl;dr is that the OTW and AO3 are not currently implicated by KOSA and many of the other bills because of our nonprofit status (most of the proposed laws only apply to for-profit institutions). This means the operations of the OTW and the AO3 wouldn’t be directly impacted by these bills
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This might be why they focus on donations and not ads - to prove their non-profit status.
I imagine that if they were to add ads, just due to site traffic they would exceed non-profit status rapidly.
Still, the existence of AO3 as it is, is potentially at threat from lawmakers, and they can and will delete stuff to stay open.
That said, AO3 also allow for downloads of stories in various formats (e-pub, pdf, etc) so you can archive your favourites yourself - taking copies is the only way for these places to exist beyond the virtual grave.
Huh, I bet AO3 is, by a significant magnitude, larger than ASSTR. I wonder just how big it would be to scrape it all and have a site backup 🤔