Civil Penalty (Order Violation)
An Administrative Law Judge issued an initial decision that, if made final, would prohibit Toys "R Us from entering into agreements with toy manufacturers and others that result in restrictions on sales to warehouse clubs. TRIJ 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 AW found that these practices reduced competition and led to higher toy prices. The initial decision 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. On October 14, 1998 the Commission issued its decision that Toys "R Us had orchestrated horizontal and vertical agreements with and among toy manufacturers to restrict the availability of popular toys to warehouse clubs. On December 7, 1998,Toys "R" Us filed a notice of appeal in the U.S. District Court for the Seventh Circuit. In August 2000, the Commission's complaint was upheld by Seventh Circuit Court of Appeals.