Amazon settles long-standing dispute with Toys R Us

Amazon.com will pay Toys R Us $51 million to settle a five-year-old lawsuit, the Seattle-based Internet retailer disclosed in a regulatory filing this afternoon.

Toysrus.com, a division of Wayne, N.J.-based Toys R Us, sued Amazon in 2004, accusing it of violating an exclusivity agreement by letting other merchants sell toys, games and baby products on the Amazon Web site.

Amazon countersued, citing a "chronic failure" by Toys R Us to keep items in stock.

Both sides severed their online partnership several years ago but the case continued in New Jersey Superior Court. This past March, a three-judge state Appeals Court panel agreed with a lower court's ruling in favor of Toys R Us, sending the case back to the lower court to reconsider Toys R Us' damage claims.

Amazon said in an April regulatory filing that Toys R Us was seeking about $93 million, which it called "grossly overstated," and expressed interest in appealing to the New Jersey Supreme Court.

This afternoon, Amazon said it will make a one-time payment of $51 million to Toys R Us in the third quarter. The settlement includes the dismissal of all claims and counterclaims, Amazon said.

Both companies declined further comment.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com