Amazon is now embroiled in a legal battle as shareholders file a lawsuit alleging that the company intentionally bypassed Elon Musk’s SpaceX for a lucrative satellite contract due to the ongoing feud between Musk and Amazon founder Jeff Bezos.
On Monday, the Cleveland Bakers and Teamsters Pension Fund (CB&T) initiated legal proceedings in the Delaware Court of Chancery against Amazon, naming Bezos, current CEO Andy Jassy, and other top executives as defendants.
The lawsuit contends that Amazon’s board breached its fiduciary duties by disregarding SpaceX, a known rival in the space industry, while awarding contracts worth $2.7 billion to Bezos’ space venture, Blue Origin, for Amazon’s Project Kuiper satellite internet system. Additionally, contracts were also granted to United Launch Alliance and Arianespace as part of the Project Kuiper deal.
Big spend
In total, Amazon is poised to spend approximately $7.4 billion on launch services provided by these three companies through 2028.
The lawsuit, which seeks unspecified damages and legal fees, asserts that SpaceX boasts the best track record among the companies awarded contracts and that a deal with Musk’s company would have been more cost-effective for Amazon.
According to the lawsuit, Amazon’s board deliberately excluded SpaceX, the most obvious and economical launch provider, due to Bezos’ personal rivalry with Musk.
Amazon’s Project Kuiper is a colossal initiative aimed at establishing a network of over 3,000 satellites to deliver broadband internet to remote areas, putting it in direct competition with Musk’s Starlink, which has already deployed more than 4,500 satellites.
Amazon responded to the lawsuit by dismissing the allegations as without merit, expressing readiness to contest them through legal proceedings.
