Competition Mission
Initial Decision

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Title	Number	Action Date	Type of Matter	Product/Service
Toys "R" Us	D9278	9/30/97	Horizontal Restraints, Vertical Restraints	Toys

Toys "R" Us

An Administrative Law Judge issued an initial decision that would prohibit Toys "R" Us from entering into agreements with toy manufacturers that result in restrictions on sales to warehouse clubs. The Judge found that Toys "R" Us enforced agreements with toy manufacturers that sought to increase the costs of warehouse clubs. Toys "R" Us threatened to stop buying products that were sold to warehouse clubs, which resulted in major toy makers' halting the sale of certain products to clubs. The Judge found that these actions reduced competition and led to higher toy prices. The Judge's order would prohibit the toy chain from entering into any agreement with a supplier to restrict sales to any toy discounter, from facilitating agreements among suppliers that would limit sales to any retailer, and for five years, from refusing to or announcing it will refuse to purchase from a supplier because the supplier sells to a toy discounter. The initial decision is currently on appeal to the Commission.

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