‘I doubt it has legs’: Why Parler has a weak antitrust claim against Amazon
Following an attack on the U.S. Capitol on Wednesday by a group of Trump supporters calling for the 2020 election results to be reversed, a number of big tech companies have taken steps to reduce the risk of further violence in the run-up to Jan 20 Inauguration.
As part of this effort, Amazon (AMZN) pulled the plug on the right-wing social media app Parler, blocked access to the Amazon Web Services (AWS) on which the app was hosted and effectively removed it from the internet.
For its part, the social network has filed a lawsuit in Washington State, claiming that Amazon's move is part of a coordinated effort in favor of competitor Twitter, which is also using AWS, rather than trying to curb violent calls related to the election results.
Parler's antitrust and contractual claims lawsuit alleges that Amazon's decision was "motivated by political impetus" apparently aimed at reducing competition. However, according to three leading antitrust experts, the lawsuit is unlikely to be successful.
"As mentioned earlier, this seems implausible as an antitrust claim," said Mark Lemley, a professor at Stanford Law School, to Yahoo Finance. "Amazon has the general right to refuse to deal with anyone for any reason or no reason at all."
Parler claims political bias
Amazon pulled up the AWS social network shortly after Twitter (TWTR) finally banned President Donald Trump from its platform due to a risk, according to Twitter, that Trump could use his account to spread further violence. Google and Apple also pulled the Parler app out of their respective app stores because of concerns that the platform wasn't doing enough to handle police calls after further violence.
However, Parler claims Amazon did not try to stop the proliferation of violent vitriol but instead helped Twitter, which recently signed a multi-year contract to use AWS to power users' schedules.
Jeff Bezos, CEO of Amazon, speaks via videoconference during a House Judiciary subcommittee hearing on Antitrust Law on Capitol Hill on Wednesday, July 29, 2020 in Washington. (Graeme Jennings / Pool via AP)
When Amazon found that Twitter's Trump ban drove some users to go to Parler, the cloud giant banned the conservative website to help its own customer.
Parler claims that Amazon not only violated antitrust laws, but also violated its contract with the social network by suspending its service with just 30 hours instead of the required 30 days.
"AWS's decision to effectively terminate Parler's account is apparently motivated by political animus," the lawsuit said. "It is also apparently intended to reduce competition in the market for microblogging services for the benefit of Twitter."
An Amazon spokesman said the suit was unfounded and that AWS served customers across the political spectrum. "It is clear, however, that there is significant content on Parler that encourages and incites violence against others," the spokesman said, "and that Parler is unable or unwilling to promptly identify and remove that content, which constitutes a violation of our terms of. " Service."
After Amazon Parler had raised its concerns for "a few weeks," the Amazon spokesman actually saw a surge in dangerous content, causing the tech giant to shut down services on Sunday evening.
An implausible claim
Despite Parler's claims, three leading antitrust researchers say the case is worth little. According to Lemley, it would be one thing if there was evidence that Amazon partnered with Twitter to target Parler, but Amazon, acting alone, does not constitute an antitrust violation.
"Depending on the agreement between the parties, there may be a breach of contract," Lemley said. "And I find it a bit troubling for political reasons that Amazon can effectively boot a website over the Internet. But that doesn't make it an antitrust violation."
After the attack on the US Capitol, Amazon removed the right-wing social media app Parler from its Amazon Web Services. (AP Photo / John Minchillo, File)
George Hay, Professor of Law and Economics at Cornell Law School, gave a similar assessment: Since Amazon is not a Parler competitor, it is not required to provide antitrust services.
"If there was an agreement between [Amazon] and [Twitter] that [Amazon] might host Twitter only," he said. "But that's not an agreement between them."
Yahoo Finance has reached out to the attorney representing Parler in its lawsuit and will update this article with any responses we receive.
John Lopatka, a law professor in Penn State, who wrote a multi-volume essay on the government's antitrust lawsuit against Microsoft, offered a clearer assessment.
"I doubt it has any legs," he told Yahoo Finance. "There's a difference between having a high-performing technology platform and an antitrust violation. Amazon faces serious antitrust challenges, but this is not one of them."
Along with Google's parent company Alphabet, Facebook and Apple, Amazon is one of the four big big tech companies that is facing antitrust lawsuits or investigations. So far, discussions about Amazon have focused on its e-commerce platform, but the AWS business, which serves as the backbone for websites around the world, has also been scrutinized by the Federal Trade Commission, according to Bloomberg. Additionally, a Wall Street Journal investigation found the company met with startups through investing and then brought competing products to market through AWS.
While Parler's antitrust lawsuit may go nowhere, the censorship concerns raised by the lawsuit could put Amazon at risk as lawmakers discuss possible legislative action on online platforms and how they monitor their content.
"That is a risk," said Lopatka, "but under current law there is no risk of antitrust liability."
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