- In the wake of the mass hysteria, that was the January 6th
riots at the US Capitol, a lot of people felt something
anything had to be done and social media was the
immediate first target, first President Trump was banned from using Facebook and Twitter, then Google and Apple made
the decision to remove Parler from their app stores, some billed Parler as a
bastion of free speech and light moderation, others said it would cater
to conservative voices, others just said it was
filled with hate speech but the companies justified their actions in removing Parler by
noting that Parler was used, to both insight and organize events, that unfolded at the
Capitol on January 6th. - What else was I supposed to do, the guy I wanted to win didn't win? - And it all came to a head, when Amazon decided to
suspend Parler's access, to their web services platform
in taking down this harmless, right-wing alternative to Facebook, millions of individuals were
left with no means of sharing, their legitimate political views or plans, to organize peaceful protests, without the oversight and intrusion of Facebook and Twitter's
clearly biased fact-checkers and haters of free speech, at least that's what some
people want you to believe. - [Narrator] Brought
to you by Mack Weldon. - Hey, Legal Eagles it's time to think, like a corporate lawyer
because Parler is suing Amazon for getting kicked off of the AWS platform but what was the basis for Amazon, to abruptly suspend the
use of their web services by this ultra conservative Twitter clone? Did they break their agreement
with Parler or even worse is there a conspiracy
between Amazon and Twitter, to nuke the competition and what does this all have to
do with the first amendment? And let's talk about the public version of why Parler got suspended? Amazon and Parler had a contract, detailing each party's
rights and responsibilities, Parler was allowed to use
Amazon as its web host but only if it agreed to
follow some basic rules, including moderating content, so, why did Amazon suspend
Parler's web services? Well, both companies agree, that Parler's lacks moderation policies, have been an ongoing source of conflict between these two companies, since at least November of last year, now, all internet hosting
companies have rules of their own, about what content is and is not allowed, Amazon and Twitter seemed to
have more stringent standards, about what content gets posted
to their website platforms, Parler on the other hand takes
a more complicated approach, to handling complaints, Parler relied on juries of
its own users to determine, whether an offensive
post broke its own rules, crowdsourcing adjudication of complaints, proved to be really slow, how slow? Well, at the time that
Amazon booted Parler, there was a backlog of 26,000 complaints, that Parler juries had yet to adjudicate and on November 17th, 2020, seven weeks before the
insurrectionist stormed the Capitol, Amazon emailed Parler to highlight
some of the violent posts that were made on its services, one post derided Michelle
Obama using racist words in response another user said, the only good Democrat is
a dead one kill them all, a representative of Parler
replied to the post, hateful as it is would not be deemed, a violation of our terms and service, Amazon essentially told
Parler that this was a problem because Parler either did not care to or they simply did not
have an effective way, to comply with the Amazon
web service company's, terms of service including
moderating violent rhetoric, the issue came to a head, after the deadly riots of the Capitol, when violent and threatening posts, continued to go unchecked by Parler, despite multiple parlays
between Amazon and Parler, the violent posts increased
with only half-hearted responses being provided by Parler to increase, their moderation efforts
by using more volunteers and on January 9th, Parler was notified by
Amazon Web Services, that at 11:59 PM on Sunday January 10th, they would stop providing web services for the website and app for a week Parler services
were completely down with only recent signs of reappearing, now when Apple and Google
removed the Parler app from their respective app stores, no one could download the app
but the data was still there and it could be migrated elsewhere but with Amazon going down not only could Parler not obtain new users but the users they currently had, could no longer use
Parler at all as a result, Parler filed a lawsuit in
federal court on January 11th, seeking a temporary restraining
order or TRO against Amazon in the hopes of either preventing
Amazon from removing them from their web services
or if that went through, putting them back on the AWS platform, so, let's dig into this lawsuit
starting with the complaints that Parler filed against Amazon, it contains three causes of
action or court thingies, that it says that Amazon has done wrong and what's as interesting as
the three causes of action, that are included are the
ones that are not included, there is nothing in this complaint, about the first amendment, why? Because that's not actually a thing as we've talked about many
times on this channel, the first amendment doesn't
apply to individual people, citizens or private companies
it stops the government from restricting or mandating
speech of its citizens, so as a result Parler doesn't
include a cause of action, against Amazon under the first amendment because that's not really a thing but the first cause of
action that Parler search, relates to the Sherman Antitrust Act and the Sherman Antitrust Act
is just about as misunderstood as the first amendment but
at least the Antitrust Act is a real legal thing that
you are allowed to claim and Parler claims that Amazon Web Services is in cahoots with Twitter and conspired to de-platform Parler, to effectively remove
them as a competitor, Parler claims this violate section one of the Sherman Antitrust Act, the federal statute which
prohibits activities, that restrict interstate
commerce and competition in the marketplace and here's the big thing that
most people don't understand about the Sherman Antitrust Act and Antitrust laws in general
which is that in the US, it's not illegal to be
a really big company. - You see GE owns kitchen all of Colorado, which in turn owns JMI of Stanford, which is a majority shareholder
in pokerfastlane.com, which recently acquired
the Sheinhardt wig company, which owns NBC outright, NBC
owns Winnipeg Iron works, which owns the AHP Chanagi
Party Meats corporation of Pyongyang, North Korea. - It's not even illegal to
be a monopoly or monopsony, that alone is not illegal but what is illegal under anti-trust laws is using your market powers
to get an unfair advantage and the number one thing you can't do, the reason antitrust laws
existed in the first place is conspire with a bunch
of other companies, to root out the competition
that's what a cartel is, it's a group of companies
who conspire together for an unfair advantage and there are a bunch of
other improper things, that are made illegal by
the Sherman Antitrust Act but what's relevant here is section one and in order to prove a violation of section one of the
Sherman Antitrust Act, basically requires proof of one, the existence of an actual conspiracy, two, intention on the part
of those co-conspirators, to restrain trade and three
actual injury to the competition and to support this claim, Parler alleges the
following facts number one, Amazon Web Services and Twitter, signed a multi-year agreement for Twitter's use of Amazon Web
Services in December of 2020 two on January 8th, Twitter
banned president Trump, giving an opportunity for Parler, to gain a large number of
disgruntled Twitter users, including Trump himself and three, less than 24 hours after
Trump's Twitter ban, Amazon indefinitely banned Parler from using its web services, Amazon's response was
that these allegations, don't meet the basic threshold requirement for a Sherman Antitrust Act, now, the Supreme court
has long held a complaint, alleging a violation of
the Sherman Antitrust Act, must provide "enough factual
matter taken as true, "to suggest that an agreement was made", however, as Amazon pointed
out in responding briefs, Parler does not even claim
that Twitter and AWS, communicated about Parler
much less formed an agreement and in fact Parler didn't
present any evidence, direct or circumstantial, that shows that there
was an actual conspiracy or intent on the part of Twitter and Amazon to restrain Parler's business, now, conspiracy doesn't require, an explicit contract between the two but Parler doesn't actually
provide any evidence, any agreement or meeting of the minds, no matter how informal was actually made or that any communications
took place whatsoever, moreover the Supreme court
has explicitly held that if a business has an independent
business justification for its conduct and there's no basis for rejecting that justification
as legitimate explanation, the case will be dismissed for example, when Sprint was sued
for allegedly colluding with other carriers to
raise text message prices a court dismissed the claim, even though text messaging prices, went up throughout the entire
telecommunications industry, Sprint had or claimed to have, an independent business justification for raising per message prices, the company wanted to
push more subscribers, to purchase bundled
calling and text plans, the court found that this was
a legitimate justification and one that all the
telecom companies shared, a desire to push people toward
buying bundles services, there wasn't any proof that Sprint, even played a leadership role in increasing per message pricing nor was there enough evidence to show, that the telecom companies
colluded amongst each other, to do everything in concert and here Parler alleges
that Amazon's motivation for taking its action was political and that it had no
legitimate business reasons for terminating the agreement and Parler goes back
towards the conspiracy idea, asserting that Amazon
wanted to benefit Twitter but Parler didn't make
a single allegation, that conversations were held, between Twitter and
Amazon regarding Parler, let alone they had some
master plan in place, to jointly stifle Twitter's competition and even if Amazon had acted unilaterally for the benefit of Twitter, that still would not be enough
for an antitrust action, again, without the conspiracy
element being satisfied, an allegation of violating
the Sherman Antitrust Act, falls on its face of course
what was more plausible, between Amazon and Twitter and frankly Apple and
Google at the same time is something referred to
as conscious parallelism, conscious parallelism is
the undisclosed imitation of another business action, this includes things like gas stations, across the street from each other, mimicking each other's prices or telecoms all raising
the price of text messages, the same was likely the case with the wave of responses to Parler in the wake of the Capitol
rights as one company realized, they needed to cut ties with this company, others without discussion or conspiracy, simply decided they needed to follow suit, to both protect their business interests and prevent future similar events, basically, everyone realized
that Parler was toxic at exactly the same time because of everything that happened, now that takes us to the
second cause of action for breach of contract and of course I saved the
breach of contract alligation for the middle of the video
because as we all know, contract law is the sexiest of all laws, that's right I'm bringing sexy contract, now the basic premise of
this allegation is twofold, first that Amazon's suspension
was really a termination for an alleged material breach and second any termination for cause, due to a purported material
breach required a 30 day notice and precure period to fix the breaches, which was not provided, now, let's just start
off by giving Parler, the benefit of a doubt here, that Amazon suspension was in
fact a de facto termination, the clause of the agreement, that Parler hangs their
argument on states, "either party may terminate
this agreement for cause "if the other party is in
material breach of this agreement "and the material breach remains uncured "for a period of 30 days
from the receipt of notice, "by the other party," now,
unfortunately for Parler, you can't pick and choose
what portion of the agreement, makes your argument seem more plausible, the customer agreement with Amazon, also contains a broader right
to terminate an agreement, without requiring a 30 day cure period in that same section referenced
by Parler and its complaint, the Amazon Web Services
customer agreement, gives specific unilateral right to Amazon, "terminate this agreement
immediately upon notice to you "for cause if we have the right
to suspend under section six "and section six allows for
suspension for any conduct, "by the customer or its user, "that's in breach of the agreement," so, the whole premise of Parler's argument is basically blown to pieces as referenced in their complaint, a breach of contract requires
the contract imposes a duty, the duty is breached and the breach proximately
causes damages to the claimant in the present instance though, the alleged duty a 30 day
notice was a straw man of sorts, it didn't matter if Amazon
gave them one day notice or no notice at all, per the terms of the
agreement that Parler signed, Amazon had a separate unilateral right, to terminate the agreement
immediately for conduct, that was in breach of the
agreement no, at the same time, a lot of people have looked
at this contract and said, gee, this contract seems super one-sided, it gives Amazon a ton of power and it seems like they
can terminate anyone for almost any reason
and people are right, that's how these contracts
are often written and companies are considered, to be sophisticated business
players and they can contract, to basically whatever they want as long as it's not against public policy and here Amazon had a contract, it's probably the same
contract uses for everyone, that hosts web content with them and Parler had the option
not to sign the contract but they chose to and
so they're bound by it, just as much as Amazon is,
Amazon just had the foresight, to write the contract that they wanted, so, let's talk about if Parler
was in breach of the contract and really these kinds of
fights are won and lost, based on what's in the contract not based on generally the
action that is undertaken, after the contract is signed, so, you can probably guess
how this is gonna turn out, so, we have to ask, did
Parler breach the agreement? And the answer to that is probably simple, they hosted a ton of content
that advocated violence, against a variety of individuals, along with other notable illegal content and they repeatedly failed to remove it but Parler's only mission, there was a backlog of
26,000 reports of content, that violated its community standards, yet remained on the
website and as a result, individuals were able to
insight and coordinate, various aspects of the January
6th attack on the US Capitol. - Boom, lawyer. - And what a lot of people think is worse is that following the horrific event, the violent and illegal content, actually seemed to increase on Parler with no sign of slowing down
and section 4.2 makes clear, that the customer is responsible, "ensure that their content
and their end users use "of their content or
the service offerings, "will not violate any of the
policies or any applicable law, "the customer is quote solely responsible "for the development content
operation maintenance and use "of its content." And in addition section 4.5
of the customer agreement, states that if you become
aware of any violation of your obligations under this agreement, caused by an end user, you will immediately suspend
access to your content and the service offerings
by such end user, so, what obligations may those be? Well, the agreement itself states, that the customer's responsible
to immediately remove and suspend end users and
content that poses security risk, to the service offerings
or any third party. - Appendix three, soft limits. - With you. - And in addition as
part of the agreement, Parler agreed to abide by
Amazon's acceptance use policy, which prohibits certain content, including the content that
"violates the rights of others "or that may be harmful to others," so the question is was
there a breach of contract? Well, based on all of
the available evidence, it certainly seems so, it's just that the breach of
contract was not by Amazon, it was probably by Parler in that, they had recklessly violated
the terms of the agreement, which resulted in a what seems
like justifiable suspension of those services and finally, that takes
us to the third claim in the complaint for
intentional interference with prospective economic advantage, Parler's basis for this claim is that a termination of
Parler's account with Amazon, will intentionally interfere
with the contracts, Parler has with its present users as well as the users it
was projected to gain, while their account was suspended, now, a successful claim under this tort, requires the establishment
of several elements, one, the existence of a valid
contractual relationship or business expectancy, two, the defendant's knowledge
of that relationship, three, an intentional interference, inducing or causing a
breach or termination of the relationship or expectancy, four, the defendant's interference
with an improper purpose or by improper means and
five, results in damage and here Parler argued that Amazon was well aware of their current growth and the potential for even more growth, highlighted by negotiations with Amazon, to increase server capacity and to capitalize on the speculation, that president Trump was
going to join Parler, after being kicked off of
Twitter and Parler argued, that this interference was
intentional and improper and used Parler's purported
breach as just a pretext, to ensure the Parler wouldn't gain steam, just at the time they
were likely to experience, a significant amount of growth but yet again Parler
leaves out the key facts, that are almost indisputable, that easily negate these allegations, especially as it pertains
to the fourth element, interference for an improper
purpose or improper means, interference claims cannot be made, where the alleged interference actions, were just simply exercising
of a contractual right, that someone actually
has it has to be improper and if you have the contractual
right to do something, that can't give rise to the
tort of intentional interference and since Amazon as we've
already made abundantly clear, had the contractual right
to terminate this contract, basically immediately an improper
means can't be identified as far as an improper purpose, Amazon points out in it's reply that, it would require Amazon to
have acted out of greed, retaliation or hostility, none of which was specifically alleged in Parler's complaint. Now, some of the facts go both ways in fact kicking Parler
off of Amazon's platform, actually hurts Amazon as well because they'd be foregoing
the revenue from Parler and there are other things
that go both ways as well, like the fact that Amazon
was willing to assist them, by helping Parler migrate their services to a different provider and
didn't hold back the data, that was presumably rightfully Parler's in a letter notifying
Parler of their suspension, Amazon stated "we will
ensure that all of your data "is preserved for you to
migrate to your own servers "and we'll work with you as best we can, "to help your migration." Now, those are Parler's three claims but there's another aspect of this, that I think Parler's
mentioned at this point, which is that Amazon has
certain affirmative defenses, just because people make
accusations against you, doesn't mean that you can't use, what's called an affirmative defense, to throw out those claims, even if those claims happen to be true and with so many things these
days this involves section 230 of the communications decency act and here much to the ire of
Trump supporters everywhere, Amazon also argued that in addition to all of the other
reasons that they provided, Parler's claims just
fail on their own rights, Amazon is also protected by section 230, this section explicitly
restricts liability, against online service
providers in certain instances, when they block perceived harmful content, section 230 (c)(2)a
specifically states that, "no provider or user of an
interactive computer service, "shall be held liable on
account of any action, "voluntarily taken in good
faith to restrict access to "or availability of
material that the provider "or user considers to be obscene,
lewd, lascivious, filthy, "excessively violent, harassing
or otherwise objectionable, "whether or not such material
is constitutionally protected" this good Samaritan rule then
provides an additional layer of protection for Amazon as
a computer service company, tasked with the tremendous responsibility of trying to provide a platform
for informational resource and political discourse, while being cognizant of the
need to protect individuals, against harmfulness information
and illegal activity and as we've talked about
on this channel before and we'll probably talk about
many times in the future, section 230 was a response to
the early days of the internet where if a website did any
kind of moderation whatsoever, they were deemed to be
constructively knowledgeable about, all of the illegal stuff
that was on their website and so it was a way to allow
websites to do some moderation, without being liable for
everything that's on their website, this applies to Amazon,
it applies to YouTube, it applies to anyone that even has a blog, that has comments on it and if you didn't have
this kind of protection, odds are they wouldn't host anything on it because they'd be too worried about, all of the illegal stuff
that's hosted on there, so, it's either an all
or nothing proposition, where there would be basically
a hundred percent moderation and nothing even remotely controversial or zero moderation at all and it would just be a complete Wild West. So as you probably know the
way Parler started this lawsuit was a request for a TRO or a
temporary restraining order, it's an emergency motion to get
someone to not do something, it started as a way to
try and prevent Amazon from kicking Parler off its platform and then it was basically
an order to demand, that Amazon put the app
back on its platform and you can imagine under
some of these circumstances, where a TRO might be granted because kicking an app off of a platform, might give rise to the kind
of irreparable damages, that a TRO is meant to solve
it's a very temporary thing, so, you can get to the
merits of the litigation, without complete destruction
that cannot be undone but to get a temporary restraining order, a plaintiff would have
to establish number one, that it's likely to succeed on the merits and as we've just talked about, that's definitely not going to happen, all three of its claims pretty
much fail pretty easily, number two, that you have to show, that you're likely to
suffer irreparable harm in the absence of preliminary relief, which in this circumstance
probably exists, having the app completely down, the website completely destroyed and needing to be rewritten
for some other platform, yeah, that could be irreparable harm, number three, the balance of
the equities tips in its favor, which definitely doesn't exist here because you can have all the
irreparable damage in the world but if you're not going
to succeed on the merits, you're not entitled to any relief if you're not going to succeed and finally, the fourth element is an injunction would be
in the public interest, which also for basically the same reasons, doesn't really exist here, now, that being said, this is
not the end of the lawsuit, contrary to a lot of media
reporting about this lawsuit, it's not over by any
stretch of the imagination in fact, this is really just
the end of the first inning, Parler took a big swing they whiffed, the court didn't grant
the emergency motions for a temporary restraining order or the preliminary injunction
but the lawsuit still exists and the court is still
going to have to adjudicate, these claims on the merit of the claims and while some preliminary evidence was provided to the court, we haven't gotten to
the discovery portion, where they can get a whole
bunch of more evidence, so, this lawsuit isn't going anywhere, generally if you lose the
temporary restraining order and the court says you're
unlikely to win on the merits, that's a really, really bad sign for the plaintiff like Parler but they still have the
option of pressing forward, except that's not what happened at all because I am Devin from the future because the day that I was
going to release this video, Parler decided to go ahead and voluntarily dismiss their own case, so, they dismissed their own case from the federal district
court in which they filed and this is one of those
cases where it's important, to recognize the difference between, a dismissal with prejudice
and without prejudice, we talk about that a lot on this channel because that is a common misconception if you get dismissed with
prejudice that means, you can never refile your
case is done it's over, the only thing you can do is appeal but when you dismiss without prejudice, you can refile your case
either in the same court or potentially in a different court if you have jurisdiction and that's exactly what
Parler decided to do here, having been trounced in federal court, Parler decided to refile their case in Washington state court and that's not an entirely
unusual thing to do often, it's because you got smacked
around in a federal court, that you decide to go
to a different court, there are times when you can do this, there are times when you can't do this, I'm not going to go
into those at the moment and here Parler has
slightly retooled their case in potentially a more favorable forum, they've added a few new claims, the first of which is a Washington state, consumer protection act claim now, Washington state along
with a lot of different states has a sort of general catch-all statute, that doesn't allow
businesses to engage in, what are considered
unfair business practices but that requires an underlying predicate, unfair business practice and they're gonna have an uphill climb, to be able to prove that Amazon engaged in some sort of unfair business
practice against Parler, into it Parler claims that Amazon engaged in unfair business
practices along the lines of forcing them to sign
a contract of adhesion and actually hacking
into their information or at least leaving open the possibility of getting hacked by other people with respect to the contract of adhesion, that's probably legally going to fail, lots of times contracts
of adhesion meaning, that you don't have any say in being able to change the contract, well, those are most of the contracts, that people engage in these days, so, the fact that it's a
contract of adhesion alone, doesn't mean it's against public policy and with respect to the hacking claim, that may be legally sufficient and that'll be a factual dispute, that the parties will
just have to litigate and furthermore Parler now
claims a defamation claim, against Amazon asserting
that Amazon defamed Parler, by alleging that Parler was unwilling, to moderate the content on its own sites and then Parler reiterates, a lot of the same breach
of contract claims, that were at issue in the federal case, though in the federal case
they were never adjudicated, so, it makes sense to reassert them here as we discussed in this video already, the evidence for these
breach of contract claims are pretty thin and again it's
going to be an appeal battle but some of these claims may be enough, to survive a motion to
dismiss and in which case, the parties will probably
engage in some discovery, that may get expensive but again, this is probably
not the end of the Parler case, it's entirely possible
that some of their claims, will survive motions to
dismiss if they're able, to get away with changing
the venue like this but whether this Parler
suit is in federal court or Washington state court, the suit probably isn't going
to go away anytime soon, just like working from
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Thanks for for heads up.
I do enjoy legal eagle
Parler? I hardly knew her
I'm somewhere where I can't watch a video. What's it about I'm 3 sentences or less?