After the extraordinary events unfolded on the Capitol Hill on January 6, many tech companies sprang into actions. Among them was Amazon Web Services taking Parler offline with less than thirty hours of notice,effective midnight January 10. In Amazon’s notice to Parler, Amazon said the reason for its action was “[b]ecause Parler cannot comply with our terms of service and poses a very real threat to public safety.”
Uproar by Parler’s users and supporters ensued. Parler brought a suit against Amazon the very next day for injunctive relief, asking the Court to order Amazon to reinstate Parler’s account. Parler made claims against Amazon on three counts: 1. Antitrust claim under the Sherman Act that Amazon contracted or conspired with Twitter to restrain trade; 2. Amazon breached contract because the suspension was really a termination and it failed to provide the thirty-day notice before termination as required by the contract; 3. Amazon tortiously interfered with the contracts Parler had with its present and potential future users. Amazon responded the next day with its rebuttal of all three claims, and on top added Section 230 as a shield that it said protected it from the interference and antitrust claims.
The reporting on Parler’s lawsuit against Amazon has focused mainly on the antitrust claim. Some have concluded that it is a weak claim. To establish the antitrust claim, Parler and Amazon seem to agree that the following elements need to be satisfied: 1) the existence of a contract, combination or conspiracy; 2) which is intended to restrain trade and 3) actual injury to competition. It appears that Parler did not allege sufficient specific facts to satisfy these elements. The only facts Parler presented were that Amazon entered into a multi-year deal with Twitter a month ago and Parler’s own belief that Amazon treated Twitter more favorably. Amazon not only denied these allegations entirely, it also asserted that Parler did not plead enough facts to meet the pleading requirements established by the famous antitrust case Twombly.
“Parler cannot comply with our terms of service and poses a very real threat to public safety.”
Parler’s stronger claim may be the breach of contract claim. At the outset, there seems to be a dispute about whether Amazon’s action was a termination or a suspension. Parler deems Amazon’s action a termination, while Amazon insists it was merely a suspension. In Amazon’s notice to Parler, Amazon said it “plan[ned] to suspend” the account. However, Parler pointed to language in the notice which said Amazon had preserved all Parler’s data and would help Parler migrate the data to its own servers as proof that the action was a permanent termination even though Amazon used the word “suspend”. If Amazon’s action is a termination of the account, Parler has a strong claim that Amazon did not comply with the thirty-day notice requirement for termination. If it is only a suspension, then Parler’s case is weaker, it needs to amend its claim to argue that it is an improper suspension. According to Amazon, the contract explicitly gives it the right to immediately suspend Parler’s account if it fails to immediately eliminate content that “may be harmful to others”. Amazon focused its argument on how Parler violated the contract terms by failing to eliminate the harmful posts timely after several warnings and reasoned that Amazon by contract terms had the right to suspend Parler’s account immediately. It seems Parler could raise some arguments as to whether the contract term content that “may be harmful to others” is too broad, and in turn whether allowing immediate suspension of the account when Parler failed to eliminate the content immediately is reasonable given the significant harm a suspension could cause Parler.
Although Parler’s antitrust claim may be “hollow” because of the lack of specific facts, the intuitive antitrust related questions this case triggers may be valid, such as whether Amazon has too much power over Parler and whether it has used its power unreasonably. Several factors contribute to Amazon’s power over Parler. First, cloud services are becoming a vital service for many platforms as they move away from the old business model of building their own storage facilities. Also, Amazon Web Services controls more than 30% of the global cloud services market. Further, Parler said in its complaint that “both [its] apps and website were written to work with AWS’s technology” indicating there are substantial switching costs. It could be argued that these three together makes Amazon’s services essential to Parler’s business, like utilities to a factory. If something is essential like utilities, should it be regulated like utilities?
At the end of the day, probably the most disturbing question from this case is: Why had the responsibility and the ability to ensure public safety fallen largely on a cloud services company’s private contract? When people think about ensuring public safety, they think about the government, not Amazon. Amazon could have chosen not to enforce the contract. But what would have happened if Amazon did not take Parler offline? Could the government or the court have stepped in to order Parler to eliminate the violent content or to go offline if the content is not eliminated, and could they have done so in a timely manner, or would the immunity under Section 230 have stood in the way? All this is uncertain. When issues of public concerns arise, the society should be able to use tools in its public toolbox to address these concerns rather than having to rely on a private party’s choice to enforce its private contract.
Ting Zheng & Alex Rutgers