Amazon hit by lawsuit over Kuiper broadband
September 1, 2023
By Chris Forrester
A pension fund which is a shareholder in Amazon has filed a lawsuit against the directors of Amazon alleging that they failed to consider SpaceX as a launch supplier for the Project Kuiper broadband by satellite scheme.
The writ, filed in Delaware’s Chancery Court, argues that the directors “acted in bad faith” in approving the launch contracts for the Jeff Bezos-backed Blue Origin rockets as well as Arianespace and the United Launch Alliance’s rockets.
The plaintiff is a pension fund for a Cleveland-based union (the Bakers & Teamsters Pension Fund).
The writ alleges that there is a personal animosity between Jeff Bezos and SpaceX founder Elon Musk, and this influenced the decision not to include SpaceX as a potential launch supplier.
Amazon’s Audit Committee of directors was informed of the intention to award the Project Kuiper launch contracts to the three named companies. A fourth potential supplier’s name was redacted in the documents.
The lawsuit alleges that the Audit Committee failed to “take any steps to oversee the negotiation process or to insulate the process from conflicts of interest”.
The plaintiffs argue that SpaceX was not considered even though SpaceX was cheaper and had a proven track record. “By excluding SpaceX, Bezos and his management team minimised bid competition for the launch agreements and likely committed Amazon to spending hundreds of millions of dollars more than it would have otherwise had to,” states the lawsuit.