FTC's 5/96 Complaint Against Toys "R" Us For Unfair Competition
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
In the Matter of
"R" Us, Inc., a corporation
DOCKET NO. 9278
Pursuant to the provisions of the Federal Trade Commission Act, and by
virtue of the authority vested in it by said Act, the Federal Trade
Commission, having reason to believe that Toys "R" Us, Inc., a
(sometimes referred to as "TRU" or "respondent"), has
violated the provisions of said Act, and it appearing to the Commission
that a proceeding by it in respect thereof would be in the public
interest, hereby issues its complaint, stating its charges as follows:
Respondent Toys "R" Us, Inc. ("TRU") is a corporation
organized, existing, and doing business under and by virtue of the laws
of Delaware, with its principal office and place of business at 461 From
Road, Paramus, New Jersey
TRU is the largest
in the United States.
It has approximately 600 stores located throughout the United States and
300 stores in foreign countries, which sell toys,
and related items ("products").
1995 its total sales were approximately $9.4 billion.
TRU's acts and practices, including the acts and
practices alleged herein, are in or affect commerce as "commerce" is
defined in the Federal Trade Commission Act.
TRU's importance as a provider of distribution to
manufacturers of toys and related products has given it the ability to
market power over those manufacturers, and TRU has exercised
clubs ("clubs") charge a membership fee and
a broad variety of products, including toys and other products
sold by TRU.
The clubs operate on lower margins than TRU or other
national chain discounters.
During the late 1980's and early 1990's,
club sales were growing at a much faster rate than other retailers.
During that period, the
wanted to increase their sales