Shulou(Shulou.com)11/24 Report--

CTOnews.com, September 3 (Xinhua)-- some shareholders of Amazon, including a pension fund that owns shares in the company, have filed a lawsuit against Amazon, its founder Jeff Jeff Bezos and its board of directors, accusing them of "violating fiduciary obligations" when purchasing launch services for the Project Kuiper satellite constellation project.

The lawsuit, filed on Thursday, alleges that Amazon did not consider the SpaceX and its Falcon 9 rocket when purchasing the Kuiper launch service. The lawsuit argues that this is the only sensible choice for Amazon to launch half of the constellation's satellites by the 2026 deadline. The lawsuit also says the Falcon 9 rocket is cheaper than its competitors and has other advantages, such as being able to use it now. The lawsuit alleges that SpaceX was excluded because of fierce and personal competition between its founder, Elon Musk, and Bezos, who also owns a rocket company that competes with SpaceX, Blue Origin. Given these factors, Amazon has refused or even considered SpaceX, and the board has not questioned the practice, revealing the extent to which Bezos' personal grudges have affected Amazon's procurement process.

Amazon signed deals with three companies-Blue Origin, United launch Alliance (United Launch Alliance) and Europe's Arianespace-in 2022. Through the deal, Amazon has acquired a large number of medium and heavy launch capabilities over the next five years, but does not take into account its direct competitor in the space Internet business, SpaceX. Amazon did not disclose the value of the deal, but the lawsuit said it was "the second largest capital expenditure in Amazon's history", after the company's $13.7 billion acquisition of whole Foods supermarket (Whole Foods) (CTOnews.com Note: about 99.599 billion yuan). In addition, the lawsuit alleges that Amazon has paid $1.7 billion (currently about 12.359 billion yuan) to the three launch suppliers, including $585 million (currently about 4.253 billion yuan) paid directly to Blue Origin.

The main problem raised by the lawsuit is that Amazon's board of directors did not consider SpaceX as a potential launch contractor, but chose companies that could benefit Bezos. Bezos founded and owns Blue Origin, and the rocket company also signed a contract with the United launch Alliance to supply rocket engines for Vulcan rockets. The lawsuit also slammed the delays in Blue Origin's New Glenn and Vulcan rockets. When approving the Kuiper launch contract, it was clear that the large rockets would not be able to launch a large number of satellites by the 2026 deadline set by the Federal Communications Commission (FCC). "delays and bad news from Blue Origin and its business partner and customer ULA now threaten the entire Kuiper project, highlighting the damage caused to Amazon by the board's complete failure to live up to its fiduciary obligations," the lawsuit said.

An Amazon spokesman said the lawsuit was groundless. "the allegations in this lawsuit are totally groundless and we look forward to proving it through legal proceedings."

Amazon announced in 2019 that it would develop a large broadband satellite Internet constellation called Project Kuiper. According to its permission from the Federal Communications Commission, Amazon must launch half of its planned 3236 satellites into low-Earth orbit by July 30, 2026. The remaining satellites must be launched within the next three years.

The lawsuit highlights the tension between Mr Musk and Mr Bezos, who chose not to fund its biggest competitor in the space internet business, regardless of SpaceX. SpaceX is five years ahead of Amazon with its Starlink constellation and has launched 5000 satellites. By buying the Falcon 9 rocket, Amazon is actually funding the further development and improvement of Starlink services.

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