‘I doubt it has legs’: Why Parler has a weak antitrust claim against Amazon – Yahoo Finance
In the wake of an attack Wednesday on the U.S. Capitol by a mob of Trump supporters demanding the overturn of the 2020 election results, a slew of Big Tech companies have taken steps to mitigate the risk of further violence in the run-up to the Jan. 20 Inauguration.
As part of that effort, Amazon (AMZN) has pulled the plug on the right-wing social media app Parler, cutting off its access to Amazon’s Web Services (AWS), which hosted the app, and effectively removing it from the internet.
The social network has, in turn, filed a lawsuit in Washington State, claiming that Amazon’s move is part of a coordinated effort to benefit competitor Twitter, which also uses AWS, rather than an attempt to tamp down on calls to violence related to the election results.
Parler’s suit, which alleges antitrust and contract claims, asserts that Amazon’s decision was “motivated by political animus” apparently designed to reduce competition. But according to three leading antitrust experts, the suit is unlikely to succeed.
“As stated it seems implausible as an antitrust claim,” Stanford Law School professor Mark Lemley told Yahoo Finance. “Amazon has a general right to refuse to deal with anyone for any reason, or indeed no reason at all.”
Parler claims political bias
Amazon pulled the social network from AWS shortly after Twitter (TWTR) permanently banned President Donald Trump from its platform due to what Twitter says was a risk of Trump using his account to spread further violence. Google and Apple also pulled the Parler app from their respective app stores over fears that the platform wasn’t doing enough to police calls for further violence.
But Parler alleges Amazon wasn’t trying to stop the spread of violent vitriol, and instead was working to benefit Twitter, which recently signed a multi-year contract to use AWS to power users’ timelines.
When Amazon realized that Twitter’s Trump ban was spurring some users to leave for Parler, the cloud giant banned the conservative site to help its own client, according to the lawsuit.
Parler alleges Amazon, in addition to violating antitrust law, breached its contract with the social network by cutting its service with only 30 hours notice, rather than the required 30 days.
“AWS’s decision to effectively terminate Parler’s account is apparently motivated by political animus,” the suit reads. “It is also apparently designed to reduce competition in the microblogging services market to benefit Twitter.”
An Amazon spokesperson said the suit lacked merit, and that AWS serves customers across the political spectrum. “However, it is clear that there is significant content on Parler that encourages and incites violence against others,” the spokesperson said, “and that Parler is unable or unwilling to promptly identify and remove this content, which is a violation of our terms of service.”
After Amazon alerted Parler of its concerns over “a number of weeks,” the Amazon spokesperson said, it actually saw an uptick in dangerous content — prompting the tech giant to suspend services on Sunday night.
An implausible claim
Despite Parler’s assertions, three leading antitrust scholars say there’s little merit to the case. According to Lemley, it would be one thing if there were evidence that Amazon conspired with Twitter to target Parler, but Amazon acting on its own doesn’t amount to an antitrust violation.
“There might be a breach of contract claim, depending on the agreement between the parties,” Lemley said. “And I find it somewhat troubling as a policy matter that Amazon can effectively boot a site off the internet. But that doesn’t make it an antitrust violation.”
Cornell Law School professor of law and economics George Hay offered a similar assessment, saying that because Amazon isn’t a Parler competitor, it has no obligation to provide it with services under antitrust law.
“If there were an agreement between [Amazon] and [Twitter] that [Amazon] would offer hosting only to Twitter, maybe,” he said. “But that is not what any agreement between them says.”
Yahoo Finance reached out to the attorney representing Parler in its suit and will update this article with any responses we receive.
Penn State Law professor John Lopatka, who authored a multi-volume treatise on the government’s antitrust lawsuit against Microsoft, offered a more blunt assessment.
“I doubt it has legs,” he told Yahoo Finance. “There is a difference between a tech platform being powerful and committing an antitrust violation. Amazon is facing serious antitrust challenges, but this isn’t one of them.”
Amazon is one of the four major Big Tech firms, alongside Google parent Alphabet, Facebook, and Apple, facing antitrust lawsuits or investigations. So far, discussions of Amazon have focused on its ecommerce platform, but its AWS business, which serves as the backbone for websites around the world, has also been scrutinized by the Federal Trade Commission, according to Bloomberg. What’s more, a Wall Street Journal investigation found that the company met with startups about investing and then launched competing products through AWS.
While Parler’s antitrust suit may not go anywhere, Lopatka said, censorship concerns raised by the suit may imperil Amazon, as lawmakers discuss potential legislative action reining in online platforms and how they police their content.
“That is a risk,” Lopatka said, “but not a risk of antitrust liability under current law.”