Social-media company Parler, popular among right-wing users, sued Amazon (AMZN) - Get Report after the Seattle tech giant's web-services cloud-hosting service dropped the platform just before midnight U.S. Pacific Time Sunday.
In an action filed in U.S. District Court in Seattle Parler, Henderson, Nev., claimed that the move broke antitrust law and violated the two companies’ contract. Parler wants a judge to order Amazon to restore its platform.
“AWS’ decision to effectively terminate Parler’s account is apparently motivated by political animus,” the suit states. “It is also apparently designed to reduce competition in the microblogging services market to the benefit of Twitter (TWTR) - Get Report."
Amazon said it suspended Parler because the platform was full of incendiary content suggesting violence. The Apple (AAPL) - Get Report and Google (GOOGL) - Get Report app stores dropped Parler over the weekend.
“There is no merit to these claims. AWS provides technology and services to customers across the political spectrum, and we respect Parler’s right to determine for itself what content it will allow," said an AWS spokesperson. "However, it is clear that there is significant content on Parler that encourages and incites violence against others, and that Parler is unable or unwilling to promptly identify and remove this content, which is a violation of our terms of service.
"We made our concerns known to Parler over a number of weeks and during that time we saw a significant increase in this type of dangerous content, not a decrease, which led to our suspension of their services Sunday evening," the spokesperson added.
Amazon’s stock closed Monday at $3,114.21, down 2.15%. It has jumped 65% over the past year.
Morningstar analyst Zain Akbari puts fair value at $3,630.
“Amazon's disruption of the retail industry is well documented, but it continues to find ways to evolve,” he wrote last month. \
“Its operational efficiency, network effect, and a brand intangible asset give its marketplaces sustainable competitive advantages that few, if any, traditional retailers can match.”
Further, “the combination of competitive pricing, unparalleled logistics capabilities and speed, and high-level customer service makes Amazon an increasingly vital distribution channel for consumer brands (especially in light of covid-19 operating restrictions hindering physical retailers),” Akbari said.
“Even with more retailers looking to expand online, we believe Amazon will maintain its consumer proposition through expedited Prime shipping, an expanding digital content library, and new customer services.”