Shareholder Sues Amazon Board Over Blue Origin Launch Contracts for Project Kuiper

An Amazon shareholder has filed a complaint against founder Jeff Bezos and the Amazon board of directors, saying that directors failed to thoroughly scrutinize a decision to give launch contracts for the firm's Project Kuiper satellite project to Bezos' space company, Blue Origin.

The case, filed earlier this week by the Cleveland Bakers and Teamsters Pension Fund, says that the Amazon board gave Blue Origin contracts worth billions of dollars while ignoring competitor Elon Musk-owned SpaceX as an alternative launch provider despite its track record.

Amazon's Project Kuiper is a network of over 3,000 satellites aimed at bringing broadband internet to rural areas. As a result, it will compete with Musk's Starlink.

In response to a question about the complaint, an Amazon representative told Reuters in an email: "The claims in this lawsuit are completely without merit, and we look forward to demonstrating that through the legal process."

According to the Cleveland Bakers and Teamsters Pension organization, a multi-employer organization, the launch contracts were the second-largest capital investment in Amazon's history at the time. Amazon's most expensive acquisition was the $13.7 billion (approximately Rs. 1,13,320 crore) purchase of Whole Foods in 2017. 

According to the complaint, Amazon has already paid around $1.7 billion (almost Rs. 14,050 crore) to the three launch providers in the project, including $585 million (nearly Rs. 4,850 crore) to Blue Origin directly, yet the business has yet to send a prototype of its Kuiper satellite into orbit.

According to Amazon, Project Kuiper will begin mass production of satellites later this year and beta testing with commercial clients in 2024. 

The 2024 deployment deadline would leave Amazon on schedule to meet the FCC's regulatory goal of launching half of its total Kuiper network of 3,236 satellites by 2026.

According to a complaint filed on August 28 in the Delaware Court of Chancery, the pension fund demands unspecified damages and legal expenses.