The partnership between Amazon.com and Toys ‘R’ Us came to an end as a judge ruled in favor of the toy retailer and its desire to end the arrangement.
What does exclusivity mean? To Amazon and Toys ‘R’ Us, the term had different meanings. The dictionary defines it as single, sole, not accompanied by others, and that is how Toys ‘R’ Us viewed it. Amazon did not, and allowed other toy retailers to sell their wares on Amazon.com alongside Toys ‘R’ Us.
To paraphrase a common net saying, legality ensued. Toys sued Amazon in May 2004 for making other toy sellers part of the site. The Seattle P-I reported that New Jersey Chancery Court Judge Margaret Mary McVeigh agreed with Toys’ complaint:
Amazon failed, the judge ruled, to honor its part of the bargain when it gave the exclusive rights to sell toys on its site to Toys “R” Us — and then hedged its bets by allowing other retailers to sell toys right alongside the Wayne, N.J.-based company’s offerings.
This decision begins a 90-day period where the two companies will separate Toys’ business from Amazon, which does intend to continue offering toys on its site. That includes returning ownership of the toysrus.com domain to Toys.
Amazon sued Toys in answering the original lawsuit. When various hot toy and baby items became unavailable for holiday shoppers from Toys in 2003, Amazon was furious at Toys’ inability to keep those items in stock for Christmas delivery. Amazon listed other third-party toy sellers to complement what Toys offered in an attempt to avoid future holiday problems.
Now, Amazon will have to find another partner that can compete with not only Toys, the number 2 toy retailer, but Wal-Mart, the number 1 toy retailer.
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David Utter is a staff writer for Murdok covering technology and business.
