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CYBER PROMOTIONS, INC. v. AMERICA ONLINE

November 26, 1996

CYBER PROMOTIONS, INC.
v.
AMERICA ONLINE, INC.; AMERICA ONLINE, INC. VS. CYBER PROMOTIONS, INC.



The opinion of the court was delivered by: WEINER

 WEINER, J.

 NOVEMBER 26, 1996

 A mere two days after this Court ruled in a Memorandum Opinion and Order dated November 4, 1996 that Cyber Promotions, Inc. ("Cyber") does not have a right under the First Amendment to the United States Constitution or under the Constitutions of Pennsylvania and Virginia to send unsolicited e-mail advertisements over the Internet to subscribers of American Online, Inc. ("AOL"), Cyber filed a motion for leave to amend its First Amended Complaint to assert an entirely different yet equally untenable theory which it claims gives it the right to use AOL's private property free of charge to send millions of e-mail advertisements to AOL subscribers that AOL's blocking of Cyber's e-mail advertisements in favor of its own advertising violates the federal antitrust laws. Specifically, Cyber contends that AOL has obtained a monopoly in the market for providing direct marketing advertising material via electronic transmission to AOL's own subscribers in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. Proposed Second Amended Complaint at PP 119-21. Not only has Cyber sought leave to file a Second Amended Complaint alleging its monopolization theory, it has also moved for injunctive relief in the form of a temporary restraining order on that claim. Cyber, however, has not cited nor has our research disclosed a single case which has granted a temporary restraining order in a Sherman Act case. In any event, after reviewing the parties' submissions and hearing oral argument by telephone, we will grant the motion to amend but deny the motion for a temporary restraining order.

 The following are facts from our Memorandum Opinion and Order of November 4, 1996 which the parties have stipulated to and which provide background to Cyber's motion for a temporary restraining order.

 1. AOL is a private online company that has invested substantial sums of its own money in equipment, name, software and reputation.

 2. AOL's members or subscribers pay prescribed fees for use of AOL resources, access to AOL and access and use of AOL's e-mail system and its connection to the Internet.

 3. AOL's e-mail system operates through dedicated computers known as servers, which consist of computer hardware and software purchased, maintained and owned by AOL. AOL's computer servers have a finite, though expandable, capacity to handle e-mail. All Internet e-mail from non-AOL members to AOL customers or members and from AOL customers or members to non-AOL members requires the use of AOL's computer hardware and software in combination with the hardware and software of the Internet and the hardware and software of the non-AOL members.

 4. Private companies compete with AOL in the online business.

 5. Although the Internet is accessible to all persons with just a computer, a modem and a service provider, the constituent parts of the Internet (namely the computer hardware and software, servers, service providers and related items) are owned and managed by private entities and persons, corporations, educational institutions and government entities, who cooperate to allow their constituent parts to be interconnected by a vast network of phone lines.

 6. In order for non-AOL members to send Internet e-mail to AOL members, non-AOL members must utilize a combination of their own hardware and software, the Internet and AOL's network.

 7. Cyber, an advertising agency incorporated in 1996, provides advertising services for companies and individuals wishing to advertise their products and services via e-mail.

 8. Cyber sends its e-mail via the Internet to members of AOL, members of other commercial online services and other individuals with an Internet e-mail address.

 9. AOL provides its subscribing members with one or more e-mail addresses so that members can exchange e-mail with one another and exchange e-mail (both sending and receiving) over the Internet with non-AOL members.

 10. AOL attached to its Memorandum of Law in Support of its Motion for Partial Summary Judgment on First Amendment Issues three sets of examples of e-mail messages sent by Cyber to AOL members. The first set (Tab 1) consists of a multi-page set of advertisements; the second set (Tab 2) consists of an exclusive or single-advertiser e-mail; and the third set (Tab 3) consists of a document called by Cyber an "e-mag." Under each tab are two examples, the first selected by AOL and the second selected by Cyber. The Court has reviewed all of the examples and notes that many of the ads include get-rich-quick ads, weight loss ads, health aid promises and even phone sex services.

 In addition to the parties's factual stipulations, the following factual findings about the Internet itself made earlier this year by our court in American Civil Liberties Union v. Reno, 929 F. Supp. 824 (E.D. Pa. 1996) are relevant:

 11. The Internet is "a giant network which interconnects innumerable smaller groups of linked computer networks." Id. at 830. In short, it is "a global Web of ...


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