Following a public comment period, the Federal Trade Commission has approved a petition submitted by Toys “R” Us, Inc. (TRU) to reopen and modify a final Commission order issued in 1998. That order followed a Commission determination, affirmed by the Seventh Circuit, Toys ‘R’ Us, Inc. v. FTC, 221 F.3d 928 (7th Cir. 2000) holding that, among other things, TRU had used its significant market power to orchestrate a “hub and spoke” conspiracy among its suppliers to restrict the supply of toys to certain warehouse clubs that would otherwise have competed against TRU.
According to TRU’s petition, submitted in January 2014, the growth of Walmart and Target, and emergence of online retailers such as Amazon.com, has reshaped competition among purchasers and sellers of toys. The Commission has modified the 1998 final order to set aside the provisions in Section II that restricted TRU’s ability to enter into certain conditional supply relationships.
The petition stated that while TRU did not seek to modify or set aside the final order’s core prohibition on facilitating or attempting to facilitate unlawful collusion, it was seeking FTC approval to set aside three paragraphs in Section II. TRU contended that eliminating these sections would allow it to engage in procompetitive (or neutral) vertical conduct that could allow it to compete more effectively.
The Commission vote approving the petition and order modification was 4-0. Copies also can be found on the FTC’s website and as a link to this press release. The FTC responded to one public comment on the petition. (FTC File No. 131-0052, Docket No. C-4405; the staff contact is Roberta Baruch, Bureau of Competition, 202-326-2861)
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