Amazon has filed a counter lawsuit against Toys R Us. Toys R Us last month accusing Amazon of breaching its exclusive rights for toys, games and baby stuff sold on Amazon. Now Amazon is fighting back asking for Toys R Us to pay more than $750M in damages, and for its contract with Toys R Us to be eliminated.
Amazon has filed suit in New Jersey, seeking to scrap its distribution deal with Toysrus.com and claiming $750m in damages from the online subsidiary of Toys R Us. This is a counterblast against the giant toy retailer which filed suit in New Jersey last month, accusing Amazon of breaching its exclusive rights for toys, games and baby stuff sold on Amazon. Toysrus.com has paid Amazon $200m since 2000 for co-branded solus tenancy rights for toys and baby goods on the site. On the strength of its Amazon deal, Toysrus.com stopped selling goods through its own website. Its $50m-a- year tenancy agreement expires in 2010.
Amazon claims in its countersuit that Toysrus.com "failed to effectively choose the top toys and baby products and to keep products in stock," The Seattle Times reports. "During peak holiday buying weeks last year, Toysrus.com was out of stock on more than 20 per cent of its most popular products... Only by enabling more sellers to sell these products — and only by doing so quickly, before the next holiday selling season - can Amazon.com begin to make up for (Toysrus.com"s) failures to provide adequate selection and to keep top-selling products in stock."