Amazon Shareholder Lawsuit Alleges Exclusion of SpaceX from Contracts

One sentence summary – A shareholder lawsuit has been filed against Amazon, alleging that the company intentionally excluded SpaceX from satellite launch contracts for its Project Kuiper internet system due to CEO Jeff Bezos’ personal rivalry with Elon Musk, with the lawsuit claiming that Amazon’s leadership breached their fiduciary responsibilities by awarding contracts to rockets that have not yet launched and are behind schedule, and failing to consider SpaceX, the leading rocket provider globally, which offers comparatively affordable Falcon 9 rockets.

At a glance

  • An Amazon shareholder lawsuit has been filed by the Cleveland Bakers and Teamsters Pension Fund.
  • The lawsuit alleges that Amazon intentionally excluded SpaceX from satellite launch contracts.
  • The lawsuit claims this exclusion was due to CEO Jeff Bezos’ personal rivalry with Elon Musk.
  • The lawsuit is currently being heard in the Delaware Court of Chancery.
  • The lawsuit asserts that Amazon’s leadership breached their fiduciary responsibilities.

The details

An Amazon shareholder lawsuit has been filed by the Cleveland Bakers and Teamsters Pension Fund.

The lawsuit alleges that Amazon intentionally excluded SpaceX from satellite launch contracts.

These contracts are for Amazon’s Project Kuiper internet system.

The lawsuit claims this exclusion was due to CEO Jeff Bezos’ personal rivalry with Elon Musk.

The lawsuit is currently being heard in the Delaware Court of Chancery.

It asserts that Amazon’s leadership breached their fiduciary responsibilities.

This breach was allegedly due to awarding contracts to rockets that have not yet launched and are behind schedule.

Screenshots of Elon Musk’s social media taunts about Jeff Bezos’ space efforts have been included as evidence in the lawsuit.

Amazon signed contracts with United Launch Alliance, Arianespace, and Bezos’ own Blue Origin for its rocket deals.

The lawsuit claims that Amazon failed to consider SpaceX.

SpaceX is recognized as the leading rocket provider globally.

SpaceX offers comparatively affordable Falcon 9 rockets.

Amazon has denied the allegations made in the lawsuit.

Blue Origin has yet to issue a statement in response to the lawsuit.

The legal action argues that Amazon’s leadership neglected meaningful analysis of the rocket launch market.

It also claims that contracts were approved without proper safeguards to prevent conflicts of interest.

These conflicts of interest allegedly stem from Bezos’ personal rivalry with Musk.

The lawsuit asserts that discussions were held with Blue Origin and three other companies for launch contracts.

However, SpaceX was not considered in these discussions.

The Amazon audit committee did not receive updates on the negotiations for nearly 18 months.

The exact contract values and Amazon’s total payment for the launches have been redacted in the legal documents.

The lawsuit claims that the audit committee only received a brief summary of the contract terms.

It alleges that the deal was quickly approved without the committee being fully informed about Bezos’ involvement.

The lawsuit also claims the committee was not informed about other potential launch providers.

It also alleges that the committee was not informed about Blue Origin’s challenges.

The lawsuit claims the committee was not informed about how Blue Origin planned to overcome those struggles.

The lawsuit draws attention to the contrast between the contract approval process and Amazon’s acquisition of Whole Foods.

In March 2022, the contracts were presented to the Amazon board for approval by the Bezos team.

The lawsuit argues that Bezos’ personal rivalry with Musk hindered him from seeking SpaceX’s assistance in launching Amazon’s satellites.

The case raises concerns about potential bias and conflicts of interest within Amazon’s decision-making process for its satellite launch contracts.

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cnbc.com
– An Amazon shareholder lawsuit claims that the company snubbed SpaceX for satellite launch contracts due to Jeff Bezos’ personal rivalry with Elon Musk.
The lawsuit was filed by the Cleveland Bakers and Teamsters Pension Fund on behalf of Amazon in the Delaware Court of Chancery.
The lawsuit focuses on Amazon’s purchase of rocket launches for its Project Kuiper satellite internet system.
– Screenshots of Elon Musk’s social media taunts about Jeff Bezos’ space efforts are included in the lawsuit.
– Amazon signed launch contracts with United Launch Alliance, Arianespace, and Blue Origin for its rocket deals.
The lawsuit alleges that Amazon leadership breached their fiduciary responsibilities by awarding contracts for Kuiper missions to rockets that have yet to launch and are behind schedule.
The lawsuit claims that Amazon excluded SpaceX from the procurement process due to Bezos’ personal rivalry with Musk.
– SpaceX is the leading rocket provider in the world, with a comparatively low market price for its Falcon 9 rockets.
– Amazon has rejected the claims made in the lawsuit.
– Blue Origin has not yet provided a statement in response to the lawsuit.
The lawsuit alleges that Amazon leadership failed to conduct meaningful analysis on the rocket launch market and approved contracts without protecting negotiations from Bezos’ conflict of interest.
– CB&T claims that discussions were held with Blue Origin and three other companies for launch contracts, but SpaceX was not considered.
The Amazon audit committee did not ask for or receive updates on the negotiations for nearly 18 months.
The contract values and total amount Amazon is paying for the launches are redacted in the lawsuit.
The lawsuit claims that the Amazon audit committee only received a brief summary of the contract terms and quickly approved the deal.
– CB&T alleges that the audit committee had no information about Bezos’ involvement, other potential launch providers, Blue Origin’s struggles, or how Blue Origin planned to overcome those struggles.
In March 2022, the Bezos team presented the contracts to the Amazon board for approval.
The lawsuit highlights the contrast between the approval process for the contracts and Amazon’s acquisition of Whole Foods.
The lawsuit suggests that Bezos’ personal rivalry with Musk prevented him from seeking SpaceX’s help to launch Amazon’s satellites.

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