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Attorney General Lockyer Announces $50 Million Antitrust Settlement with Toy Companies

Toys "R" Us, Major Toy Makers To Provide Giveaways To Needy California Kids
Tuesday, May 25, 1999
Contact: (415) 703-5837

(Sacramento) – Attorney General Bill Lockyer today announced settlement of the antitrust lawsuit against Toys "R" Us and two major toy manufacturers that will provide $50 million in cash and toy giveaways to children in California and the rest of the country.

The settlement resolves an antitrust action brought against Toys "R" Us, and the nation's top toy maker Mattel of El Segundo and The Little Tikes Company of Hudson, Ohio, by California and 43 other states, the District of Columbia and the Commonwealth of Puerto Rico.

"This settlement with the toy companies allows us to brighten the holidays for thousands of needy California children," Lockyer said. "We'll also be able to help states tackle other antitrust enforcement cases."

The antitrust lawsuit alleged that Toys "R" Us conspired with the toy manufacturers to limit the toys available to discount operations such as Price-Costco and Sam's Club. By restricting discount warehouses to the sale of only "combination packages" or less popular individual toys, Toys "R" Us made it difficult for consumers to comparision shop.

Lockyer noted that California's share of the toys for the giveaways is valued at $3.89 million. The toys will be distributed by the "Toys for Tots" program of the US Marines over the next three holiday seasons.

Under the settlement terms, which are subject to court approval, Toys "R" Us will pay a total of $40.5 million in cash and toys. Mattel, the nation's largest toy manufacturer, will pay $8.2 million in cash and toys and the Little Tikes Company will pay cash and toys totaling $1.3 million. Toys and books from the companies will are being distributed on a population-based formula to the litigating states, the District of Columbia and Puerto Rico. The cash payments will be made available to state attorneys general for other multi-state antitrust enforcement actions. As part of the settlement, the defendants admit no wrongdoing.

Another defendant, toy manufacturer Hasbro, earlier agreed to pay $5.9 million in cash and toys. Hasbro provided some $475,000 in toys to California children in December 1998.

To faciliate public access to the settlement agreement, a copy will be made available on a web site location to be announced after approval of the settlement by the court.

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