Amazon Shareholder Files Lawsuit Against Jeff Bezos and Amazon Board Over Project Kuiper Contracts
August 31, 2023
An Amazon shareholder has recently filed a lawsuit against Amazon founder Jeff Bezos and the company’s board, alleging that the directors failed to properly vet the decision to award launch contracts for Amazon’s Project Kuiper satellite project to Blue Origin, Bezos’s space company. The lawsuit, filed by the Cleveland Bakers and Teamsters Pension Fund, claims that the Amazon board awarded contracts worth billions of dollars to Blue Origin without considering SpaceX, owned by Elon Musk, as a potential alternative launch provider.
Project Kuiper is Amazon’s planned network of over 3,000 satellites that aims to provide broadband internet to remote regions. This puts it in direct competition with Musk’s Starlink. However, the lawsuit argues that the Amazon board did not give fair consideration to SpaceX, despite its established track record in the space industry.
In response to the lawsuit, an Amazon spokesperson stated that the claims are “completely without merit” and expressed confidence in the legal process.
The Cleveland Bakers and Teamsters Pension Fund contends that the launch contracts awarded to Blue Origin were the second-largest capital expenditure in Amazon’s history at the time. Amazon’s largest acquisition to date is its $13.7 billion acquisition of Whole Foods in 2017.
According to the lawsuit, Amazon has already paid approximately $1.7 billion to the three launch providers involved in Project Kuiper, including $585 million directly to Blue Origin. However, the company has not yet launched a prototype of its Kuiper satellite into orbit.
Amazon has announced plans to begin mass-producing the satellites later this year and start beta testing with commercial customers in 2024. The company’s goal is to fully deploy half of its 3,236 satellite network by 2026, as mandated by the Federal Communications Commission.
The pension fund is seeking unspecified damages and legal fees with this lawsuit, which was filed on August 28 in the Delaware Court of Chancery.
Reporting by Chandni Shah and Abinaya Vijayaraghavan in Bengaluru, with additional reporting by Lavanya Ahire. Edited by Kevin Krolicki and Miral Fahmy.
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