March 2, 2006, 12:00 AM

A New Jersey court upholds Toys ‘R’ Us suit against Amazon.com

As a result of a decision handed down this morning by New Jersey Superior Court judge Margaret Mary McVeigh, Toys ‘R’ Us says it will terminate its e-commerce and merchandising agreement with Amazon.com and operate Toysrus.com as an independent site.

 

Toys ‘R’ Us Inc. has won its lawsuit against Amazon.com in a New Jersey court. Toys ‘R’ Us was seeking to get out of its contract with Amazon for Amazon to run the Toys ‘R’ Us web site. The suit alleged that Amazon had violated a contract that granted Toysrus.com exclusivity in the toys, games and baby products category on Amazon.com.

As a result of the decision, handed down this morning by New Jersey Superior Court judge Margaret Mary McVeigh, Toys ‘R’ Us says it will terminate its e-commerce and merchandising agreement with Amazon.com within 90 days. The two companies signed their agreement in August 2000.

The court decision allows Toys ‘R’ Us, No. 26 in the Internet Retailer Top 400 Guide to Retail Web Sites to operate Toysrus.com as an independent e-commerce site. "We are pleased that the court reached a verdict favorable to Toys ‘R’ Us in the company`s litigation with Amazon.com," says David J. Schwartz, general counsel for Toys ‘R’ Us. "Our goal was to protect the Toys ‘R’ Us brand while continuing to provide a positive shopping experience for our online customers. This ruling allows us to do that."

Toys ‘R’ Us says it is now talking with a numbers of potential retail web site partners and fulfillment service providers, though no names have been disclosed. "We have been preparing for today`s decision and expect to provide seamless online access for our customers to the world`s greatest toy store at Toysrus.com," says senior vice president John Sullivan. "Tighter integration of our online business with our brick and mortar locations will enhance customer service by creating a more unified web and retail shopping experience."

Amazon.com says it disagrees with the court decision, but will continue to offer a strong lineup of toys-related merchandise. Amazon also isn’t saying if it plans to appeal the decision. “We strongly disagree with the judge’s ruling in this case and we are in the process of reviewing a number of different options,” says an Amazon spokeswoman. “Regardless of the outcome, however, we remain committed to ensuring a great selection of toys – at great prices – for our customers.” Amazon is No. 1 in the Internet Retailer Top 400 Guide to Retail Web Sites.

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