AMAZON.COM, INC. | Report on the legal, regulatory, reputational, and other relevant risks associated with the sale of misoprostol. at AMAZON.COM, INC.

Status
Omitted
Previous AGM date
Resolution details
Company ticker
AMZN
Lead filer
Individual
ESG theme
  • Social
ESG sub-theme
  • Public health
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Resolved: Shareholders request that the Board of Directors of Amazon.com, Inc. issue a report, or disclose analysis which has already been performed, at reasonable cost and excluding proprietary information, evaluating the legal, regulatory, reputational, and other relevant risks associated with the sale of misoprostol. The analysis should also assess whether continuing to sell this product aligns with the company’s fiduciary duty to shareholders.
Whereas clause
Whereas: Amazon’s core mission is to deliver safe, effective products while maximizing shareholder value. However, the company’s decision1 to sell misoprostol, a drug commonly used in chemical abortions, raises serious concerns about risk exposure and fiduciary responsibility. Misoprostol is used for medication abortions and is associated2 with significant health risks, including hemorrhage, infection, and potential long-term reproductive complications. When taken with mifepristone, misoprostol accounts for the vast majority of chemical abortions. The FDA has already signaled increased review3 of abortive drugs following safety concerns, and state attorneys general have warned companies about potential violations of federal law, including the Comstock Act, which prohibits mailing abortion-inducing drugs. Companies like Target, Disney, and Bud Light have suffered prolonged reputational harm and significant dents to brand value after engaging in politically charged issues.4 The abortion debate is even more divisive, and misoprostol, which is cited as5 part of “most common medication abortion regimen offered by US providers,” is at its center. Amazon should also heed the significant legal risks of distributing such drugs. Fourteen states already have laws protecting unborn life, with 28 states currently restricting or banning abortion drugs. 6 Further action to distribute the drugs involved in chemical abortions could trigger political backlash in these and other states. State attorneys general have issued warnings7 to companies distributing abortion drugs. If the Trump administration reinterprets the Comstock Act, this raises serious litigation and business risks. Not only would this potentially place Amazon’s more than $18 billion8 worth of federal contracts in peril, but damage may extend to Amazon’s $800 million brand value,9 roughly a third of its $2.4 trillion market cap. 10 Further costs incurred may include internal legal reviews for distribution programs, potential prosecution risk from attorneys general, and increased legal liability for Amazon’s executives. These costs are estimated by FactSet analysis at roughly $30 million annually. Amazon should not jeopardize its reputation, incur legal 1 https://www.amazon.com/misoprostol/s?k=misoprostol 2 https://www.fda.gov/drugs/postmarket-drug-safety-information-patients-and-providers/misoprostolmarketed-cytotec-information 3 https://abcnews.go.com/US/health-secretary-rfk-jr-launches-review-abortion-pill/story?id=125908299 4https://bowyerresearch.com/docs/Corporate%20Political%20Activism%20and%20Shareholder%20Value.p df 5 https://www.guttmacher.org/2024/03/medication-abortion-accounted-63-all-us-abortions-2023-increase53-2020 6 https://www.guttmacher.org/state-policy/explore/medication-abortion 7 https://www.cnn.com/2023/02/01/politics/cvs-walgreens-medication-abortion-republicans 8 https://www.executivegov.com/articles/top-government-contracts-won-by-amazon-web-services 9 https://www.kantar.com/Campaigns/BrandZ/Global 10 https://finance.yahoo.com/quote/AMZN/ costs, or invite regulatory or political scrutiny for a product that offers such comparatively low financial upside. Amazon’s fiduciary duty is to act in the best interest of shareholders. Selling a controversial product that generates virtually no profit while exposing the company to such heightened regulatory scrutiny, litigation, and reputational harm is inconsistent with that duty

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