Amazon (AMZN.US) triumphs in lawsuit against third-party sellers and capacity expansion.
1min read A US judge has dismissed a lawsuit against amazon (AMZN.US) that alleged the online retail giant deceived shareholders by favoring its own brands and expanding its production capacity, ultimately leading to the Federal Trade Commission's antitrust lawsuit against the company.The decision by Seattle-based Judge John Chun on Monday is final, meaning the class action lawsuit cannot be refiled.The shareholders alleged Amazon hid an algorithm to ensure its own-brand products were cheaper than external goods, which generally raised consumer prices.They also said Amazon hid its over-expansion of its infrastructure and delivery network, which caused its stock price to plummet in April 2022 when the company incurred $2bn in costs due to overcapacity and reported its first quarterly loss since 2015.But the judge found "no compelling and specific facts" that the executives knew and concealed Amazon's alleged favoritism of its own-brand products or believed Amazon's expansion was too aggressive.Chun also found the allegations that executives tried to deceive shareholders by "making Amazon look as successful as possible" to boost their pay and sell stock at a high price were not sufficient.Chun said the "more reasonable inference" from the complaint was that Amazon and the individual defendants used "devious business tactics" to focus on boosting the company's profits.The Federal Trade Commission sued Amazon in September 2023, alleging it used its monopoly power to prevent other sellers from discounting, which raised consumer costs and "degraded" the shopping experience.Eighteen US states and Puerto Rico joined the FTC lawsuit.The shareholder lawsuit covered shareholders who held Amazon stock between February 1, 2019 and April 28, 2022.
Ask Aime: What is the impact of the judge's dismissal of the shareholder lawsuit against Amazon on the company's stock price and future antitrust actions?
