CASE STUDY 1
1. In 2004, Toys R Us sued Amazon.com for violating terms of the agreement between the companies; specifically, Toys R Us objected to Amazon.com’s permitting Amazon Marketplace retailers to sell toys (Note: when the lawsuit was filed, Amazon Marketplace was called “zShops”). Amazon.com responded by filing a countersuit. After more than two years of litigation, a New Jersey Superior Court judge ruled that the agreement had been violated by both parties. The judge ordered that the agreement be terminated and denied both companies’ claims for monetary damages. Amazon.com appealed the ruling. In 2009, an appellate court affirmed the lower court ruling but reversed the ruling on damages, which had awarded Toys R Us $93 million plus interest. In June 2009, the two companies finally agreed in an out of court settlement that Amazon.com would pay damages of $51 million. Use your favorite search engine and the links in the Online Companion for Case C1 to review the courts’ findings and rulings. Prepare a report of about 200 words in which you summarize each company’s arguments and the rationale given by the judges for their decisions. Conclude the report by stating what you believe the outcome of the dispute should have been and why.
2. Outline the advantages and disadvantages that Amazon.com would have considered before it made the agreement with Toys R Us to limit competing toy sales. In about 200 words, summarize these advantages and disadvantages, then evaluate Amazon.com’s decision to enter such an agreement.
3. In about 200 words, outline specific recommendations you would have made to Amazon.com in 2004 for negotiating a settlement with Toys R Us that would have benefited both companies and avoided litigation.
4. In 2009, Amazon.com purchased Zappos, a highly successful shoe retailer that was started in 1999. Many industry observers believe that the design and layout of the Zappos Web site has been an important element in the company’s...
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