E-commerce giant Amazon has been cleared of allegations that it misled shareholders about its treatment of third-party sellers and its strategy for expanding capacity.
A lawsuit that claimed Amazon had engaged in fraudulent activities has been dismissed by a US judge with prejudice, preventing the possibility of refiling the case, Reuters has reported.
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The dismissal, handed down by Judge John Chun in Seattle on 17 March 2025, puts an end to the proposed class action that accused Amazon of manipulating an algorithm to favour its own products over those from external merchants.
This purported action was said to inflate consumer prices across the board.
Shareholders also contended that Amazon had not been transparent about the overextension of its infrastructure and fulfilment network.
This alleged lack of transparency was linked to a significant stock price drop in April 2022 after Amazon reported its first quarterly loss since 2015, alongside an excess capacity cost of $2bn.
However, Judge Chun determined that there were no substantial facts to support the claim that Amazon executives, including former CEO Jeff Bezos and his successor Andy Jassy, intentionally concealed the favouritism towards their products or the aggressive expansion strategy to mislead shareholders and profit from inflated stock sales.
Chun’s ruling suggested that while Amazon may have engaged in aggressive business tactics with a focus on profit maximisation, there was insufficient evidence of any intent to defraud shareholders.
The legal development comes amidst ongoing antitrust litigation by the Federal Trade Commission (FTC), which filed a suit against Amazon in September 2023.
The FTC alleges that Amazon has abused its market dominance to prevent other sellers from offering lower prices, leading to higher costs for consumers and a diminished shopping experience.
The antitrust case has garnered support from eighteen states and Puerto Rico and is set for a bench trial before Judge Chun in October 2026.
The now-dismissed shareholder lawsuit represented individuals who held Amazon shares between 1 February 2019 and 28 April 2022.
In January 2025, Amazon faced a proposed class action lawsuit alleging that the company covertly monitored and commercialised detailed location data of its consumers in California.
