A U.S. judge dismissed a lawsuit accusing Amazon of defrauding shareholders about its treatment of third-party sellers and plans to expand capacity, culminating in a Federal Trade Commission antitrust case against the online retail giant.
Reuters
Monday’s dismissal by U.S. District Judge John Chun in Seattle was with prejudice, meaning the proposed class action cannot be brought again.
Shareholders accused Amazon of concealing an algorithm that ensured its private-label products would cost less than outside merchandise, raising prices for consumers generally.
They also said Amazon concealed the overexpansion of its infrastructure and fulfillment network, causing its stock price to tumble in April 2022 when it incurred $2 billion of costs for excess capacity and posted its first quarterly loss since 2015.
But the judge found no “compelling and particularized facts” to suggest executives knew and covered up Amazon’s alleged favoring its own products over those of outside sellers, or believed its expansion was too aggressive.
Chun also found insufficient allegations that Amazon officials including former Chief Executive Jeff Bezos and his successor Andy Jassy intended to defraud them by “making Amazon seem as successful as possible,” in order to boost their pay and sell stock at inflated prices.
“The more plausible inference” from the complaint, Chun wrote, “is that Amazon and the individual defendants employed sharp business practices and were single-mindedly focused on increasing corporate profits.”
The FTC sued Amazon in September 2023, accusing it of using monopoly power to keep other sellers from lowering prices, causing consumers to pay more and “degrading” the shopping experience.
Eighteen U.S. states and Puerto Rico have joined the FTC lawsuit. A nonjury trial before Chun is scheduled for October 2026, court records show.
The shareholder lawsuit covered owners of Amazon shares from February 1, 2019, to April 28, 2022.
