Stock in Amazon.com has doubled in value over the past five years. Some shareholders felt that wasn't good enough and filed a lawsuit against the online shopping giant. They'll have to learn to be happy with what they have after a U.S. district judge in Seattle dismissed the suit on March 17, 2025.
The claims that Amazon.com defrauded shareholders on third-party seller pricing tactics and concealed plans to expand capacity that affected the stock price fell short of convincing the court that Amazon.com was liable. However, relief may be found in a different suit filed by the Federal Trade Commission (FTC).
You'd Be Smiling, Too
Amazon.com is the largest online retailer in the world, generating over $246 billion in revenue in 2024. With an average of over 454 million unique monthly visitors and 2.41 billion total visits per month, Amazon is a giant like no other. They revolutionized the online retail market through a business model many thought couldn't work to become one of the internet's biggest success stories.
Despite the grinning logo printed on the side of their shipping boxes, not everyone is happy with Amazon.com. In this case, the call of alarm came from inside the house. Upset over two of Amazon.com's business practices, shareholders decided to take their grievances to court.
You Should Have Said Something
Both of the allegations in the class action lawsuit against Amazon.com accuse the company of defrauding the shareholders by not sharing information that affected the company's bottom line and stock price. This applied to those who held Amazon.com stock between February 1, 2019, and April 28, 2022.
The first issue addressed was Amazon.com's pricing practices with regard to third-party sellers. The suit accused Amazon.com of concealing the use of an algorithm that assured the company's self-produced and owned products cost less than similar outside merchandise available on the platform. This, the suit alleged, raised prices and potentially hurt sales.
The second count focused on Amazon.com keeping the expansion of its infrastructure and fulfillment centers a secret from stockholders. When the news got out in April 2022, the financial world considered it an overexpansion.
Amazon.com stock tumbled and the company posted a quarterly loss for the first time in seven years. The suit argued that by keeping shareholders in the dark about the expansion, Amazon.com removed the ability to sell stock ahead of the news.
Taking Stock of the Situation
U.S. District Judge John Chun wasn't buying the package the shareholders were trying to deliver. He ruled that there was no compelling evidence that Amazon.com executives were covering up their pricing algorithm system or that they had doubts the expansion would be a success in the long run. Instead, he noted that they were showing "sharp business practices" and striving to increase company profits.
Judge Chun went so far as to dismiss the class action suit with prejudice, which means it can't be brought before the court again. The same judge is presiding over an antitrust suit against Amazon.com brought by the FTC in September of 2023. It charges Amazon.com of using monopolistic power to keep other sells from lowering their prices.
Puerto Rico joins 18 other states in the filing. The case is scheduled for a bench trial in October of 2026.
Related Resources
- What Is Antitrust Law and Trade Regulation? (FindLaw's Learn About the Law)
- Fraud and Financial Crimes (FindLaw's Criminal Charges)
- Amazon's Pricey Secrets Lead to FTC Lawsuit for Antitrust Violations (Findlaw's Courtside)
