Argument Justification
Autor: kr3294 • December 12, 2012 • Research Paper • 864 Words (4 Pages) • 1,127 Views
THE ARGUMENTS
(1) TOYS R US
“Plaintiff, Toys R Us had alleged that Amazon.com had breach the Strategic Alliance Agreement (SAA) signed between both parties on August 2000.”
Argument Justification
Ten-year Strategic Alliance Agreement (SAA) had been executed since August 2000 between Toys R Us and Amazon.com. Under section 5 of the agreement, both parties agree that Toys R Us is the only supplier of toys, games and baby stuffs in Amazon website. Toys R Us had been given “co-branded” stores which referred to a subpage under Amazon.com, that functioning as the online stores for Toys R Us to market their exclusive products. Furthermore, Toys R Us had to give up their website and migrated to Amazon.com. Under section 5.1.1, Toys R Us has the right to choose the product that will be featured through the “co-branded” store; whether it is 1Exclusive Products, 2Selected Exclusive Products or 3Non-Exclusive Products. For the exclusivity promises by Amazon, Toys R Us had agreed to pay sum of $50 million per year.
In 2003, the burst growth of the Internet brings opportunities to the online merchant to market their products extensively. Google Advertisement allows Sponsored Links to be added in the websites. Amazon also takes the advantages on having some revenues on the customer’s click from the Sponsored Links. In other words, Amazon had allowed third parties to market or advertises their product; except toys, games and baby stuffs that have been sold by Toys R Us. Moreover, Amazon had introduced GUI Technology, which permits third parties; or small retailers to sell toys on their site, including the toys that have been sold by Toys R Us.
Those selling initiative strategies create dissatisfaction on Toys R Us side. Thus, Toys R Us commenced this suit, sought for a termination of the agreement and compensation for the breach of the agreement.
(2) AMAZON.COM
“Amazon filed a countersuit against the toy retailer, asking a judge to allow termination of its contract with Toys "R" Us and award it in excess of $750 million” (WINGFIELD, 2004)
Argument Justification
Under section 12.1.2 of SAA also provides that the agreement does not restrict:
(c) Amazon.com. and his Affiliates from selling, and permitting third parties to sell, Exclusive Products through the Amazon.com. site (other than through the Co-Branded Stores), provided that such sales by Amazon.com. and its Affiliates, or any such Third Party . . . do not constitute more than three and one-half percent (3.5%) of the
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