In a Federal Trade Commission antitrust complaint against the online retail behemoth, a U.S. judge dismissed a lawsuit alleging that Amazon.com had misled shareholders about its treatment of third-party merchants and plans to increase capacity.
TakeAway Points:
- A U.S. judge dismissed a lawsuit accusing Amazon.com 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.
- 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.
- Telegram CEO announced his return to Dubai.
Amazon defeats shareholders
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.
The case is Joyce v Amazon.com Inc et al, U.S. District Court, Western District of Washington, No. 22-00617.
Telegram’s Durov is back in Dubai
Pavel Durov, the Russian-born founder and CEO of Telegram, said on Monday that he had returned to Dubai.
Durov was arrested at an airport near Paris last August and subsequently placed under formal investigation, with a ban on leaving France.
Durov said he had spent several months in France “due to an investigation related to the activity of criminals on Telegram. The process is ongoing, but it feels great to be home.”
“I want to thank the investigative judges for letting this happen, as well as my lawyers and team for their relentless efforts in demonstrating that, when it comes to moderation, cooperation, and fighting crime, for years Telegram not only met but exceeded its legal obligations,” he said.
