May 24, 2004, 12:00 AM

Toysrus.com sues Amazon over sales by competing retailers on Amazon.com

Toysrus.com says its contract grants exclusivity on Amazon for products it sells in the toy, game, and baby product categories. But the company counts more than 4,000 items in those categories on offer at Amazon.com from competing retailers.

Toys “R” Us online subsidiary Toysrus.com has filed suit against Amazon.com, alleging that Amazon has violated a contract granting Tousrus.com exclusivity in the toys, games and baby products category on Amazon.com. Toysrus.com says the contract, which dates back to when it began selling on the Amazon platform in August 2000, gives it exclusivity on the Amazon platform through 2010.

Toysrus.com says it has attempted to resolve the matter outside of the courts, including third-party mediation. The company says it does not expect the legal filing to disrupt products and services it now offers on Amazon.

As of last week, according to Toysrus.com, more than 4,000 products in categories for which the contract gives Toysrus.com exclusivity were being offered for sale by competing retailers on the Amazon.com platform. In one example, a search on Amazon on the game Pictionary Jr. offered shoppers a link to Esportsonline.com rather than taking them to Toysrus.com, which sells the item.

“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,” says David J. Schwartz, senior vice president and general counsel for Toys “R” Us Inc. Inc. “We would be happy to compete with other vendors in thee categories, but we are not willing to pay for exclusivity that we are not receiving.”

In a statment, Amazon.com called the allegations of Toysrus.com "without merit," and said it would not comment further on the pending litigation. However, "We are relentlessly focused on increasing selection for customers consistent with our contractual commitments. Among other things, we believe we can have multiple sellers in the toy category, increase selection, and offer products that Toysrus.com doesn`t have," Amazon said in the statement.

Toysrus.com will continue to make payments to Amazon per the terms of the contract while the matter is resolved, Toysrus.com says. The suit was filed in Superior Court of New Jersey, Chancery Division, Passaic County.

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