September 4, 2015 (Shareholders Foundation) - An investigation on behalf of current long-term investors in shares of Amazon.com, Inc. (NASDAQ:AMZN) shares was announced over potential breaches of fiduciary duties by certain officers and directors at Amazon.com, Inc.
The investigation by a law firm concerns whether certain Amazon.com, Inc. officers and directors breached their fiduciary duties and caused damage to the company and its shareholders.
In 2011, the FTC initiated an investigation of various companies' mobile-app sales practices after receiving complaints from parents that their children were making 'unauthorized' purchases on mobile app stores. Unlike Apple and Google, who both agreed to settle with the FTC over charges that its in-app purchase process constituted an unfair business practice under 5 of the FTC Act, Amazon.com, Inc. refused to settle the charges, prompting the FTC to file suit on July 10, 2014.
According to the FTC's complaint against Amazon.com, Inc., the FTC alleged that Amazon violated the FTC Act by billing parents and other Amazon account holders for charges incurred by their children without the permission of the parent or other account holder. The complaint alleges that when Amazon.com, Inc. introduced in-app charges to the Amazon Appstore in November 2011, there were no password requirements of any kind on in-app charges, including in kids' games and other apps that appeal to children. According to the complaint, this left parents to foot the bill for charges they didn't authorize. The complaint highlights internal communications among Amazon.com, Inc. employees as early as December 2011 that said allowing unlimited in-app charges without any password was 'clearly causing problems for a large percentage of our customers,' adding that the situation was a 'near house on fire.'
Although Amazon.com, Inc. moved to dismiss the complaint, onDecember 1, 2014, Judge John C. Coughenour denied Amazon's motion, stating that Amazon.com, Inc. may still have violated federal laws against unfair billing, whether the charges were unauthorized or not.
Amazon.com, Inc. reported that its annual Total Revenue rose from over $74.45 billion in 2013 to over $88.98 billion in 2014 and that its Net Income of $274.00 million in 2013 turned into a Net Loss of $241million in 2014.
Shares of Amazon.com, Inc. (NASDAQ:AMZN) grew from $286.95 per share in January 2015 to as high as $537.01 per share in August 2015.