Amazon Wins Dismissal of Shareholder Lawsuit
A U.S. judge has dismissed a shareholder lawsuit against Amazon.com, which accused the company of misleading investors about its treatment of third-party sellers and its capacity expansion plans. The dismissal, handed down Monday by U.S. District Judge John Chun in Seattle, was with prejudice, meaning the case cannot be refiled.
Shareholders had alleged that Amazon concealed an algorithm favoring its private-label products over those of outside sellers, leading to inflated consumer prices. They also claimed the company hid the extent of its overexpansion in infrastructure and fulfillment, which purportedly caused a stock price decline in April 2022. At that time, Amazon reported $2 billion in costs due to excess capacity and posted its first quarterly loss since 2015.
However, Judge Chun found a lack of “compelling and particularized facts” to support the claim that executives knew about and concealed Amazon’s alleged preferential treatment of its own products or that the expansion was overly aggressive. The judge also found insufficient evidence to support the claim that Amazon officials, including former CEO Jeff Bezos and current CEO Andy Jassy, intended to defraud shareholders to boost their compensation and sell shares at inflated prices.
The judge wrote, “The more plausible inference… is that Amazon employed sharp business practices and was single-mindedly focused on increasing corporate profits.”
The lawsuit is linked to a separate antitrust case filed by the Federal Trade Commission (FTC) in September 2023. The FTC accuses Amazon of leveraging its market dominance to prevent other sellers from reducing prices, resulting in higher costs for consumers and a degraded shopping experience. Eighteen U.S. states and Puerto Rico have joined the FTC’s suit. A nonjury trial before Judge Chun is scheduled for October 2026, according to court records.
The shareholder lawsuit covered owners of Amazon shares between February 1, 2019, and April 28, 2022.
The case is titled Joyce v Amazon.com Inc et al, U.S. District Court, Western District of Washington, No. 22-00617.
