Toys R Us Hit With Antitrust Charges

WASHINGTON, D.C.: The Federal Trade Commission voted Wednesday to file antitrust charges against toy retail giant Toys R Us. The commission accuses the company of "using its market power to keep toy prices higher." Regulators charge that Toys R Us keeps prices up by using its size to pressure toy manufacturers not to sell to rival retailers. Manufacturers say the company will not buy products carried by large warehouse clubs, in effect using the clout of a company that accounts for more than one-fifth of the $19-billion-a-year U.S. toy business to keep suppliers selling only to them. Toys R Us CEO Michael Goldstein disputes the FTC's charges. He says the company must use such tactics to remain competitive with warehouse clubs that stock the hottest-selling items a few weeks before Christmas and sell them at or below cost to attract buyers. "Given that behavior, and Toys R Us' contribution to the industry" says Goldstein, "we have told manufacturers that we reserve our unquestionable right to refuse to carry the same items as warehouse clubs." Goldstein adds that the practice is central to Toys R Us' ability to compete, "supposedly the ultimate goal of FTC policy." Scot Woods