Tuesday, May 25, 1999
AUSTIN - Texas Attorney General John Cornyn today announced a $50 million antitrust national settlement with Toys "R" Us, the nation's largest toy retailer, and toy manufacturers, Mattel and The Little Tykes Company. Texas, along with forty-three other states, the District of Columbia, and the Commonwealth of Puerto Rico, charged that Toys "R" Us orchestrated illegal agreements with toy manufacturers to restrict the supply of popular toys. The Texas share of the national settlement provides $2.3 million worth of toys for thousands of needy Texas children.
"Breaking antitrust laws will not be tolerated in Texas," said General Cornyn. "Providing toys to needy children is appropriate compensation for their unfair actions."
The states alleged that Toys "R" Us used its market power to obtain anti-competitive agreements with toy manufacturers. These agreements limited the sale of certain toys to warehouse clubs and forced the manufacturers to sell the toys in multi-toy packaging. These practices ensured that consumers could not easily compare the retail prices charged by the clubs to those charged by Toys "R" Us.
Under the terms of the settlement, Texas will coordinate the national distribution of the toys through the U.S. Marines "Toys for Tots" program during the holiday season over the next three years. The $50 million worth of toys and cash payments will be divided among the states based on each state's population.
Pursuant to the terms of the settlement, which are subject to court approval, Toys "R" Us will pay $40,500,000 in cash and toys. Mattel, the nation's largest toy manufacturer, will pay $8,222,900 in cash and toys, and The Little Tykes Company will pay cash and toys totaling $1,316,250. Previously, Hasbro, also a defendant in this lawsuit, agreed to pay $5,950,000 in cash and toys.
Texas will also receive cash payments of $754,976 to be used for toys, books or other educational materials for Texas children. Assistant Attorneys General Kelly Garcia and Rebecca Fisher and Investigators Pam Perkins and Kay Thomas handled the settlement.
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