Why Amazon Is Suing Toys 'R' Us - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Business & Finance
News
6/29/2004
05:15 PM
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%

Why Amazon Is Suing Toys 'R' Us

Once a dream team, the two retailers suddenly have a lot to say at each other in court.

Leading Internet retailer Amazon.com Inc. on Monday countersued Toy "R" Us Inc., alleging breach of contract. The online retailer is seeking more than $750 million in damages or, potentially, the termination of the contract itself.

A little more than a month ago, Toys "R" Us sued Amazon because, Toys "R" Us lawyers said, their client no longer is the sole seller of certain categories of toys on Amazon.

Amazon alleges that its business has been harmed by Toys "R" Us' "chronic failure" to meet its obligations. For instance, Amazon claims, Toys "R" Us has had trouble maintaining sufficient stock. According to court papers, Toys "R" Us has been out of stock on more than 20% of its most-popular products. The company claims that Toys "R" Us' inventory problems handicap Amazon in its battle with Wal-Mart Stores Inc. and others.

The lawsuit also dismisses Toys "R" Us' exclusivity argument, stating that the pair's governing agreement, signed in 2000, allows for exceptions. Amazon asserts that the agreement makes toys and games and baby products non-exclusive categories.

The complaint also states that Amazon and its third-party affiliates have the absolute right to sell any toys and games or baby products online so long as sales do not constitute 3.5% of Toys "R" Us' annual revenue from the sale of selected exclusive products. The complaint states that no affiliated vendors even approach this percentage.

Key among Amazon's goals is a declaration that it's entitled to immediately launch a service that enables third-party vendors themselves to post items for sale on Amazon. Toys "R" Us' original lawsuit seeks an injunction to prevent Amazon from deploying this new technology.

An Amazon spokeswoman declined to comment about the case.

Asked to comment, a Toys "R" Us spokeswoman offered this prepared statement: "We believe this counterclaim has no merit. We are currently engaged in mediation and have agreed to avoid additional commentary."

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Commentary
Enterprise Guide to Edge Computing
Cathleen Gagne, Managing Editor, InformationWeek,  10/15/2019
News
Rethinking IT: Tech Investments that Drive Business Growth
Jessica Davis, Senior Editor, Enterprise Apps,  10/3/2019
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll