“For a year and a half, Bezos was free to identify and negotiate with launch providers for Amazon, while also free to negotiate against Amazon on behalf of Blue Origin.” Musk-Bezos rivalry “By excluding SpaceX, Bezos and his management team minimized 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.”īezos, the suit concludes, was able to negotiate from both sides given his roles at Amazon and Blue Origin. The suit argues that the contracts are unfair to Amazon, in part because SpaceX was not even considered: “Despite being the launch provider with the most proven track record and the lowest prices in the industry, SpaceX was seemingly not considered by Amazon,” the complaint states. The board approved the contracts in a meeting lasting 40 minutes. The suit claims the board received no expert review of the contracts or other information, including whether the final price was fair to Amazon and whether other launch providers were considered, beyond a 2.5-page summary of the proposed contracts. The full board met in March 2022 to consider all three launch contracts. The suit argues that the committee spent “no more than a few minutes” discussing the contracts, based on the length of the meeting and number of items on the agenda, before approving them and forwarding them to the full board of directors. While the value of the Atlas launch contract is redacted in the suit, it argues that SpaceX’s list price for Falcon 9 launches was significantly less.īy January 2022, Amazon management provided the board’s audit committee with summaries of the contracts it planned to sign with Blue Origin and ULA for Kuiper launches. That included not just the overall launch contracts but a smaller interim contract that Amazon announced in April 2021 for nine Atlas 5 launches from ULA. While the identity of the fourth potential launch provider is not made public in the suit, it does state that Amazon’s board was informed SpaceX was not under consideration. The full board was briefed in November 2020 on plans for Project Kuiper, including its consideration of Blue Origin and ULA, among others, for launch contracts, which the suit said did not result in the board taking any action about potential conflicts of interest: “no guidelines, no oversight, and no expressions of concern.” The committee, the suit stated, “did not take any steps to oversee the negotiation process or to insulate the process from conflicts of interest.” Bezos, at the time, was chief executive of Amazon and remains its largest shareholder, while also owning Blue Origin. Amazon board’s review of Kuiper contractsĪccording to the suit, Amazon management informed the board’s audit committee in July 2020 it was considering Arianespace, Blue Origin, ULA and a fourth company whose name is redacted in the public version of the complaint for launch contracts. It also suggests that personal animus between Bezos and Elon Musk, founder of SpaceX, prevented Amazon from considering SpaceX for those contracts. The suit is filed by the Cleveland Bakers and Teamsters Pension Fund, an Amazon shareholder, and sheds new light on how Amazon selected Blue Origin and ULA, along with Arianespace, for contracts announced in April 2022 to launch the 3,236-satellite constellation. Delaware Business Court Insider first reported the lawsuit. 28, alleges that Amazon’s board and one of its committees spent “barely an hour” reviewing contracts with Blue Origin and United Launch Alliance, whose Vulcan Centaur rocket uses engines from Blue Origin, before approving them in March 2022. The suit, a public version of which was filed with Delaware’s Court of Chancery Aug. WASHINGTON - A pension fund has filed suit against the board of directors of Amazon, claiming they “acted in bad faith” in approving launch contracts for the Project Kuiper broadband constellation that awarded billions of dollars to Blue Origin, the company founded by Amazon’s Jeff Bezos.
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