A U.S. judge on Thursday granted Amazon.com Inc's request to temporarily halt the U.S. Department of Defense and Microsoft Corp from moving forward on an up-to-$10 billion (£8 billion) cloud computing deal that Amazon says reflected undue influence by President Donald Trump.
Amazon didn't respond to a request for comment. Trump has publicly derided Amazon head Jeff Bezos and repeatedly criticized the company. Both the documents requesting the block and the judge's decision to issue the temporary injunction are sealed by the court.
A public court notice, however, confirmed the injunction on the Pentagon and noted that Amazon will have to establish a security fund of $42 million that will be used to pay damages if the court later finds the injunction was improper.
The Pentagon has been forced to suspend work on a multi-billion dollar military contract awarded to Microsoft after a legal challenge from Amazon, which has claimed it lost out on the deal due to a personal feud between Donald Trump and its chief executive Jeff Bezos.
Bezos also owns the Washington Post, whose coverage has been critical of Trump and which has frequently been a target of barbs by Trump about the news media.
Amazon was considered the lead contender to provide technology for JEDI, with AWS dominating the cloud computing arena and the company already providing classified servers for other government agencies including the CIA.
Shares of Amazon were down 0.4 percent Thursday afternoon at $2,151.38, while Microsoft was down 0.5 percent at $183.87.
The Joint Enterprise Defense Infrastructure (JEDI) contract was awarded to Microsoft last October.
Amazon was considered an early front-runner for the contract, which Pentagon officials have said is important to advancing the USA military's technological advantage over adversaries.
Microsoft said in a statement: "We have confidence in the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process". The White House declined comment.
The company is also looking to question the former and current secretaries of defence and other officials. Amazon called the process "fatally flawed and highly unusual".