Putting an end to the long running legal battle between Amazon and Toys R Us, Amazon.com has agreed to pay the Giraffe over $50 million dollars after the toy retailer objected to Amazon’s violation of a marketing arrangement which guaranteed Toys R Us exclusive sales through the online retailer.
Toys R Us claims that Amazon allowed other toy resellers to compete with Toys R Us through the online portal, which was a violation of their partnership agreement.
Amazon’s counter argument in the dispute, which had been waged since 2004, was that Toys R Us failed to provide adequate stock to meet orders, leaving Amazon no choice but to fill orders through other retailers. Amazon cited the first year of their agreement when during a peak holiday season, Toys R Us didn’t ship orders until well after Christmas prompting numerous complaints and cancelled orders.
Recently, however, Amazon’s argument was rejected by the New Jersey court of appeals which sides with a lower court that said that Amazon was indeed in breach of the partnership agreement but stopped short of awarding Toys R Us any of the $90 million plus damages the company requested. The settlement of 60% of what was sought comes at the eleventh hours before the appeals court awarded any damages.
Amazon is due to pay out $50 million dollars by July. That’s a heck of a lot of action figures.
Hat Tip – USA Today