On January 11, 2021, Parler LLC, a social networking service similar to Twitter, filed a lawsuit against Amazon Web Services (AWS) after Amazon terminated Parler’s account. According to the complaint filed in the U.S. District Court for the Southern District of New York, Parler claims that Amazon’s decision violated antitrust laws and constituted an illegal attempt to stifle competition from Parler in the market for microblogging services.
Parler’s lawsuit claimed that Amazon had unlawfully terminated its contract with Parler primarily due to the social media site’s alleged content moderation policies surrounding promoting violence within its platform and failure to control unlawful use of their platform. Furthermore, Parler argued that Amazon abused its dominant market position by monopolizing and attempting to monopolize web hosting services technology used by similar services.
What is Amazon’s response? In response to legal action being taken against them, AWS defended its decision by saying: “AWS provides technology and services to customers across the political spectrum, and we continue to respect Parlers “right to determine for itself what content it will allow.” Additionally, AWS said it was obligated under its terms of service agreement with all its customers to suspend or terminate any customer if activity on their system affects potential harm or risks associated with AWS’s mission.
Despite these claims, however, AWS has yet been unable to provide any substantial evidence that would reveal the degree to which hosting on AWS’ servers violated company standards or harmed customers when asked about this by news outlets.
Background of the Case
Parler, the conservative-friendly social media platform in the headlines lately, has filed suit against Amazon. The suit claims that Amazon has violated antitrust laws and attempted to shut down the platform’s operations. In the lawsuit, Parler raised far-fetched antitrust allegations, which Amazon has not yet responded to publicly.
In this article, we will discuss the background of the case and Amazon’s response.
Overview of Parler
Parler is a free-speech social media platform. It was founded in August 2018 with the mission of allowing its users to express themselves freely and openly without fear of repercussions or censorship. The platform has drawn criticism for partaking in extreme content, but for many, it is a safe haven for their voices to be heard without judgment or suppression.
On January 11, 2021, Parler sued Amazon Web Services Inc., alleging that Amazon illegally removed the platform from its hosting services. According to Parler CEO John Matze, “We were taken down by people who wanted to silence us, not because we violated any terms.” Parler claims that Amazon unlawfully retaliated against their company by cutting off access due to political bias and will now “seek all available remedies in state and federal courts” to seek justice.
Overview of Amazon
Amazon is an American technology company based in Seattle, Washington, focusing on e-commerce, cloud computing, digital streaming, and artificial intelligence. It began as an online marketplace for books but later expanded its business to include a wide variety of products and services. Amazon is one of the world’s largest Internet companies by revenue and market capitalization.
The company has seen significant growth since its founding in 1994, with over $280 billion in annual sales as of 2020. In addition to the online marketplace, Amazon also provides several customer-facing products and services such as Alexa (its digital assistant), Ec2 (cloud hosting service), Prime Video (a streaming video service), Kindle e-readers, Fire tablets (tablets running the Fire OS operating system), smartphones (handsets running the Fire OS operating system) and Web Services (third-party web hosting). Amazon has also invested in numerous other companies through acquisitions or investments.
Recently, Amazon was sued by Parler — a social network espousing far-right content—for antitrust activities under the Sherman Act. The suit alleges that Amazon’s decision to suspend Parler from its web hosting platform resulted in reduced competition and higher prices for users of other social media sites like Facebook and Twitter. Despite these accusations leveled against them, Amazon maintains that their decision was motivated by safety concerns arising from frequent posts inciting violence on Parler without moderating or controlling it properly.
Allegations Against Amazon
Recently, Twitter alternative Parler sued Amazon in Seattle, raising far-reaching antitrust allegations against the tech giant. According to the lawsuit, Amazon wrongfully targeted and suspended the Parler app from its web-hosting service and app stores for political reasons.
Amazon has responded to the allegations, rejecting the claims as ‘baseless.’
This section will look into Amazon’s response and the legal arguments presented in the complaint.
Parler sues Amazon, leveling far-fetched antitrust allegations
Parler’s lawsuit against Amazon, filed in the U.S. District Court for the Eastern District of Washington on February 5, 2021, centers around allegations that Amazon used antitrust law violations to remove the channel from its platform. Additionally, Parler contends that Amazon intentionally discriminated against it by singling it out for removal due to political pressure and campaign promises made by then-President-elect Joe Biden.
According to the complaint, Parler’s legal team alleges that Amazon Web Services (AWS) suspended the site without warning just one day before President Biden was inaugurated. These actions caused catastrophic damages to Parler’s business since it had relied solely on AWS hosting services at the time. As such, it claims that Amazon’s decision was framed as a ‘technical decision’ but was actually a politically motivated, economically harmful decision intended to ‘destroy a nascent competitor.’ In addition, Parler is highly critical of multiple other of Amazon’s practices which were allegedly discriminatory such as having longer contracts and flexible hosting policies for major customers like Twitter or Facebook as opposed to short-term contracts and inflexible policies regarding content moderation put forth when dealing with Parler.
Finally, they zeroed in on them, deciding who could become an AWS customer and who could not based on their specific political opinions or economic clout, which is contrary to Section 2 of the Sherman Act prohibiting monopolistic behavior and anticompetitive conduct due to long-established laws protecting parallel competition through Section 1 of the Sherman Act of 1890. The basis for this suit falls under antitrust, whose goal is mostly about protecting competition itself rather than any one particular company over another for business practices to maximize consumer welfare so then healthier markets can develop rather than allowing monopoly control or exercising power using exclusionary tactics dictating pricing instead of letting market forces dictate price via healthy competition.
In response to the lawsuit filed by Parler claiming antitrust violations against Amazon, Amazon Web Services (AWS) has stated that it took the action of suspending Parler’s access to its services due to a breach of contract between the two companies.
According to a statement released by AWS, “Parler is responsible for ensuring that it and its users comply with applicable laws. It also agreed-upon contractual terms, including representations and warranties related to content and compliance with applicable laws, as well as provisions requiring that Parler implement measures designed to prevent misuse of their service.”
Furthermore, AWS believes that “Parler did not provide [by January 10] substantive commentary on how they plan[ned] to promptly comply with [they] stated Terms of Service before the suspension was necessary.” This lack of response prompted Amazon’s decision to protect its customers from continuing challenges associated with operating its services on behalf of Parler. As a result, completing their obligations under the more specific terms laid out in their original agreement led Amazon Web Services on January 10 to suspend Parler from using their services.
Parler has filed an antitrust lawsuit against Amazon, alleging that the tech giant has a monopoly over the cloud computing market and is unfairly punishing Parler for political viewpoints.
This article will provide a legal analysis of the merits of the case and Amazon’s likely response.
Antitrust laws are in place to protect against monopolies, allowing companies to remain competitive and allowing consumers to have a choice when it comes to the products they purchase. These laws are enforced by the Federal Trade Commission, which is tasked with making sure companies are not engaging in activities that would limit or impair competition. In the case of Parler suing Amazon, it appears that Amazon has removed Parler from their web hosting platform due to safety and security concerns raised by the content posted on the platform and therefore has been accused of violating antitrust laws.
When looking at whether or not Amazon is engaged in any anticompetitive conduct, several factors must be considered. These include market power, an assessment of how much control a company has over its competitors; barriers to entry; evidence of competitive behavior such as tying or predatory pricing; and an analysis of potential effects on consumer prices, quality, choice, and innovation.
In this case, it appears that Amazon’s decision is related more to safety and security concerns than attempting to gain control over their competitors or impair competition. Amazon has argued that the content posted on Parler’s platform violated their terms of service and was offensive in nature. It can be argued that Amazon made a legitimate business decision only intended to protect their customers’ safety based upon the relevant factors above. It remains unclear whether courts will agree with this argument moving forward.
Applicability of Antitrust Laws
When examining the Parler lawsuit against Amazon, it is important to examine the applicability of antitrust law to determine if the claims made by Parler are valid. Antitrust law seeks to protect competition among companies in the same market. In this case, the relevant markets are social media and cloud computing services.
The Sherman Antitrust Act prohibits companies from entering into unreasonable restraints of trade or creating monopolies that restrict production or innovation within an industry. In other words, it seeks to prevent businesses from gaining a monopoly in their given market by buying out competitors or preventing new competitors from entering the market.
Given that Amazon is a large company with immense power, it is essential to determine if its actions towards Parler fall within the purview of antitrust law. Several key factors should be examined to answer this question, including Amazon’s intent, effect on competition, and potential justifications for its action.
The conclusion to Amazon’s dispute with Parler is yet to be determined, as the case is ongoing. However, Amazon has denied Parler’s allegations and maintains that the decision to deny hosting services was based on concerns about Parler’s lack of sufficient content moderation protocols.
Going forward, Amazon must prove that it did not act anticompetitively and that its enforcement of reasonable content guidelines does not run afoul of federal antitrust law. But, whatever the outcome may be, one thing is sure – Amazon’s response serves as a cautionary example for future companies seeking to regulate user-generated content on their platforms.