Parler is Not an Enigma: Section 230 Applies to Antitrust Claims

By: Tallman Trask

Parler’s antitrust lawsuit against Amazon has been widely derided. Professor and noted antitrust scholar Herbert Hovenkamp commented that the suit was not “going to fly” because “there really aren’t any facts” in the complaint to support the kind of conspiracy Parler is alleging. TechDirt called it “laughably bad.” Reuters described what it called the suit’s “hollow core,” quoting experts who suggested a complete lack of any antitrust problem in the facts Parler alleges. Finally, Judge Barbara Rothstein pointed to the lack of evidence presented when she denied the company’s motion for a preliminary injunction, suggesting the evidence Parler had presented did not meet the Twombly standards, which require that an antitrust complaint allege a conspiracy that is not merely conceivable, but rather one that is plausible, and include “enough factual matter to suggest an agreement” (and reporters following the case described the Judge as “not impressed”).

But no matter the merits of the suit itself, there is one aspect of Parler’s filings that sits at the intersection of several popular and trendy topics regarding Big Tech and the law: Section 230 of the Communications Decency Act and the Sherman Act. Section 230 allows interactive computer service providers to escape liability for removing content they find “obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.” And the Sherman Act, as it applies here, prohibits every “contract, combination . . ., or conspiracy, in restraint of trade or commerce among the several States.” In a supplemental filing, Parler claims that Amazon cannot be “immune under Section 230 of the Communications Decency Act” (as Amazon has claimed they are) because Parler’s “federal and state claims all are based on allegations of anticompetitive conduct.” That is, Parler says Section 230 immunity does not extend to cover antitrust claims, at least not in the Ninth Circuit.

Parler is wrong.

There is No Blanket Antitrust Exception to Section 230

            In making their claim, Parler relies on Enigma Software Group USA, LLC v. Malwarebytes, Inc., a 2019 case where the Ninth Circuit looked at the overlap of Section 230 and antitrust law. As applicable to Parler’s claims, the facts in Enigma are simple: Malwarebytes, a provider of security software, changed its system and began to flag a competitor’s products as security risks. It then encouraged users, through pop-up warnings and other means, to neither download nor install the competitor’s software. The competitor, which did not similarly flag Malwarebytes’ products, sued, claiming that their products were not security risks and that Malwarebytes was acting not out of concern for the security of their customers, but out of “anticompetitive animus.” Malwarebytes, in turn, claimed that the allowance for removal of “otherwise objectionable” content in Section 230 provided them with immunity from the claims. The Ninth Circuit disagreed, holding that “immunity under § 230 . . . does not extend to anticompetitive conduct.”

Parler’s filing interprets the holding from Enigma as prohibiting any claim of immunity under Section 230 whenever there is an allegation of anticompetitive behavior. That is not, however, what the Ninth Circuit held, and there are clear differences between Enigma and Parler’s claims. First, while the Ninth Circuit has “held that ‘immunity under [§ 230] does not extend to anticompetitive conduct,’” the holding is limited. It merely clarifies that where “a provider’s basis for objecting to and seeking to block materials is because those materials benefit a competitor,” the provider is not entitled to immunity under Section 230. In other words, the Ninth Circuit held that Section 230 immunity does not extend to cover moderation driven by anticompetitive desires. That is not, however, the equivalent of holding, as Parler claims, that Section 230 cannot and does not cover any conduct wherever there is a claim that said conduct was potentially anticompetitive. At most, the Ninth Circuit has held that there is some conduct which is so purely anticompetitive, so clearly outside the bounds of the intent of the “otherwise objectionable” exception in Section 230, that it cannot possibly fit within Section 230 immunity. The court has not, however, ruled that Section 230 immunity does not exist where a provider responds to content clearly within the “otherwise objectionable” category (as the hate speech, violent threats, and other content on Parler’s site was) simply because there may be some potential anticompetitive effect if the provider moderates, or removes the content or user access to its services.

While the Ninth Circuit’s analysis of the interaction between Section 230 and the Sherman Act is more extensive than that which other circuits have undertaken, other courts have broadly agreed with the Ninth Circuit. For example, the D.C. Circuit, considering a slightly different claim made under both Section 1 and Section 2 of the Sherman Act, concluded that Section 230 immunity was warranted. Writing for the court, then Chief Judge Merrick Garland concluded that the “complaint [was] barred by § 230 of the Communications Decency Act,” while noting “that immunity is not limitless” and in some cases Section 230 may not apply. Further, a view of Enigma which holds that Section 230 applies, but is not unlimited, meshes with earlier Ninth Circuit interpretations of the applicable law.

While past decisions clearly suggest that Section 230 immunity can apply in at least some antitrust contexts (and should apply in the context of Parler’s suit), Parler’s suit is also different from Enigma in at least one other important way. While Enigma was a dispute between direct competitors, Parler’s dispute with Amazon is between a service provider and a company which purchases the service, a distinction which made Enigma different from earlier decisions but did not eliminate the earlier interpretation that Section 230 applies in a limited way. Moreover, there was a genuine dispute in Enigma over whether the competitor’s software was actually “objectionable,” while there is no question that content on Parler’s site was objectionable, a contention supported by dozens and dozens of screenshots filed with the court by Amazon, which clearly show vile content from Parler, which Parler has not countered.

While Enigma does address the space where Section 230 overlaps with antitrust law, it does not hold that immunity ends where anticompetitive effects potentially begin. Rather, the Ninth Circuit has been more limited in its conclusions. Parler’s claims that Amazon cannot enjoy Section 230 immunity do not fit within the bounds of the law, and they do not fit within the Ninth Circuit’s understanding of the limits of Section 230.

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