[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

FTC v Toys "R" US

        This is an update of a prior discussion.  When the FTC took on Toys
  "R" US (TRU) for coercing Hasbro from selling to the price clubs,  a
  perceptive list member pointed out that this didn't make sense since
  Hasbro would lose a lot of profits by foregoing price club sales and that
  it was implausible that a 20% oligopolist like TRU could browbeat a huge
  monopolist like Hasbro.  At that time,  I suggested that TRU must be
  returning the favor by keeping products competitive with Hasbro off its
                Our reaction has now been corroborated by the FTC,  as
  shown in the following citations from the Judge's Initial Decision:
             "178.  Verrechia (HasbroÂ’s CEO)  had complained to TRU that it
                 selling knock-offs of HasbrosÂ’ merchandise and "that was
  one of                   the things  he hoped to gain in return." (i.e.
  in return for not selling to                 the price clubs.)
                    180.  The effort by Hasbro to seek concessions from
  TRU,                               including  knock-offs is corroborated
  in a Hasbro documentÂ…
                    n227.  Mr. Goldstein,  vice-chairman and CEO of TRU,
  testified                        that  respondent providesÂ…services for
  manufacturers                                      includingÂ…avoiding
  knock-off toys. (Imitations)."
              The judge calls this Quid pro Quo.  The QPQ factor explains
  why "mere"  number of competitors (e.g. 10 competitors will give you more
  competition than 5 and  2 or 3 or 4 won't give you much competition at
  all) are important in antitrust as Adam Smith and his faithful student
  Chuck Mueller have been saying all along.
                Incidentally 1:  What are "knock-offs".  Why they are legal
  products which a first-comer hates because they provide competition.
                Incidentally 2:  Anti-Monopoly has disappeared from the
  shelves of TRU and the other mass merchants and Hasbro calls it a 
  "knock-off",  never mind that the object of the "knock-off"  was stolen
  from the public domain and inventors and Anti-Monopoly is a patented
  innovation over Monopoly.    
                 Incidentally 3:  Given what appears in the Initital
  Decision,  why isn't the FTC going after Hasbro?  Does it think that
  Hasbro is a poor, victimized giant or does it buy the idea it mentions, 
  i.e. that Hasbro is only a 10 to 14% monopolist in some giant toy and
  game market.  If the later,  it must have been brainwashed by cluster
  theory economists.
  Merry Christmas and a Happy New Year