Toysrus.com, a subsidiary of Toys "R" Us Inc., announced it filed a lawsuit against Amazon.com to protect its exclusivity rights in the Toy and Game and Baby Products categories for its online ecommerce site on the Amazon.com platform. The suit was filed in Superior Court of New Jersey, Chancery Division, Passaic County. Toysrus.com does not anticipate that this lawsuit will cause any disruption to the products and services offered on its Web site and does not expect it to affect its customers and suppliers.
According to the announcement, the contract between Amazon.com and Toysrus.com states that Toysrus.com is the only authorized seller of Toy and Game and Baby Products on the Amazon.com platform through 2010. When the agreement was signed in August 2000, Toysrus.com stopped selling products through its own site to join the Amazon.com platform.
Toysrus.com said it attempted to resolve the matter amicably, including engaging third-party mediation. "We expect Amazon.com to respect its contract with us and to support our position especially since we pay a very high fee to maintain this exclusivity," said David J. Schwartz, Senior Vice President - General Counsel for Toys "R" Us, Inc. "As of May 17, 2004 there were more than 4,000 products in exclusive categories being offered through competitive retailers on the Amazon.com platform. This violates the letter and spirit of our agreement. We would be happy to compete with other vendors in these categories, but we are not willing to pay for exclusivity that we are not receiving."
Toysrus.com said it has made significant quarterly payments to Amazon.com over the last four years for exclusivity in the Toy and Game and Baby Products categories and will continue to make payments in accordance with its Amazon.com contract in order to maintain the right to exclusivity while this matter is being resolved.
"We have supported Amazon.com's entrance into new retail categories and services in order to grow their business, and we are dedicated to working through a resolution together," said Greg Ahearn, Vice President - General Manager, Toysrus.com. "Toysrus.com is the #1 leader in online retailing of children's products. With more than 10,000 items available we look forward to continuing to bring the broadest assortment of products directly to our customers through our website. For our customers, it will be business as usual during this time."
