Amazon Gets Injunction Blocking Microsoft's Pentagon Cloud Contract

A judge orders a temporary halt requested by Amazon for the $10 billion contract that was granted to Microsoft.
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A judge granted Amazon.com (AMZN) - Get Report an injunction seeking to block a $10 billion contract the Pentagon awarded to rival Microsoft (MSFT) - Get Report to build the cloud infrastructure for the military’s computer systems.

A court notice announcing the injunction was filed on Thursday but wasn’t public, according to multiple news outlets.

The ruling would temporarily halt work on the Joint Enterprise Defense Infrastructure project.

The project cannot proceed "until further order of the court," according to the decision by the Court of Federal Claims Judge Patricia Campbell-Smith, Bloomberg reported, adding the decision remains under seal. 

A Microsoft spokesman told Bloomberg it was disappointed in the ruling. 

"We believe that we will ultimately be able to move forward with the work to make sure those who serve our country can access the new technology they urgently require," spokesman Frank Shaw told Bloomberg. 

Amazon last week filed a motion to depose President Donald Trump, Defense Secretary Mark Esper and former Defense Secretary James Mattis over the decision to award the contract to Microsoft.

Trump has been a vocal critic of Amazon CEO Jeff Bezos and the company seeks to make sure that personal animosity didn't play a role in awarding the contract to Microsoft.

Amazon alleges that Trump wanted to “harm his perceived political enemy" - Bezos - in exerting pressure to block Amazon from the deal. Trump has often criticized Bezos because he owns the Washington Post, which editorially has been critical of the president.

According to reports, Trump delayed awarding the contract in 2018 after receiving complaints about internal favoritism toward Amazon.

Oracle CEO Safra Catz reportedly complained to Trump about the issue at a private dinner in April 2018, according to a Bloomberg report at the time.

Amazon’s cloud business, AWS, is the market leader in cloud computing, but Microsoft’s Azure cloud company has closed the gap between the two companies in recent quarters. 

Amazon shares were down 0.08% Thursday to $2,158.25, while Microsoft was down 0.19% at $184.36.