What 'law' are they enforcing here? They are enforcing their own TOS, which is perfectly within their right. I'm not saying this is the right thing for them to do, but he is using their service, so they have a right to enforce their TOS. He is perfectly able to move his blog post, unedited, to another VPS provider if he does not like what they are asking him to do.
slander... the guy he was blogging about is not famous, not a public figure, talking trash, about someone by name in a public way is slander - perhaps this helps explain further: http://en.wikipedia.org/wiki/Defamation
Oh I understand what slander is, and whether or not the blog post actually is slander or not is debatable. My point was that, in this case, DO has decided to use the 'slander' clause in the TOS to ask this person to edit his blog post. I don't necessarily think they should be doing this, but I am saying that they are perfectly within their right to enforce their TOS how they see fit. If the OP doesn't agree with them, there is nothing that says he can't move his content to another provider that may not make the same decision DO has.
> whether or not the blog post actually is slander or not is debatable
Yes it is, it's relative to the laws of a given country what is considered slander and what is not.
> I am saying that they are perfectly within their right to enforce their TOS how they see fit
There are laws around slander and DO has no right to enforce them, because last time I checked vigilantism was illegal.
> If the OP doesn't agree with them, there is nothing that says he can't move his content to another provider that may not make the same decision DO has.
How easy or hard to move his content is irrelevant, the fact is he paid for a service which the provider terminated citing unproven(innocent until proven guilty) claims based on a one liner email from some random person on the internet.
The TOS is a contract. If the poster has "defamed" someone within the meaning of the contract, then DO is within their right to terminate. Moreover, the TOS also gives DO a lot of discretion to make their own determination of what constitutes defamation.
It is not vigilantism because DO is not threatening to throw the poster in jail over an allegedly illegal act. They are simply enforcing their contractual rights.
You could argue that this is a breach of contract, and that the poster must be shown in court to have defamed someone before the contract is terminated, but note that the section of the TOS that DO cites also says that the poster cannot "harass or embarrass" someone. That's pretty vague and gives DO a lot of leeway to argue that the poster breached the TOS. It's a pretty crappy TOS to be sure, but I wouldn't bet money on the poster winning a court case here.
You keep saying they are enforcing 'the law,' when in fact they are just enforcing their own TOS, which is perfectly within their rights.
> the fact is he paid for a service which the provider terminated
This makes it sound like they just shut down his account, when in fact they communicated with him, telling him exactly what he would need to do to bring his content into compliance with their TOS, at which point he would presumably have continued access to his account. At this point, it would be his choice about whether to continue his relationship with DO, or to move to another provider.
There are laws regarding defamation, I don't think DO can just opt in to enforce them. They can write anything in their TOS, wether or not it's legally enforceable is another question.
"Wins?" I'm not quite sure what you mean by "winning." In this case, DO is enforcing _their_ own TOS, on content that is served from _their_ servers. That seems legit to me, whether or not I think it is the right thing for them to do. Is there a law stating that they don't have a right to do this?
law always win of course, the TOS are always full of stuff that is unenforceable in the eyes of the law.
That being said you do need to hire a lawyer to check if thats the case every time and thats spendy.