{"id":3030,"date":"2011-03-30T13:15:00","date_gmt":"2011-03-30T13:15:00","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/2011\/03\/30\/ftc-spanks-toys-r-us-for-violation-of-mandated-supplier-communication-practices\/"},"modified":"2021-07-12T09:56:20","modified_gmt":"2021-07-12T13:56:20","slug":"ftc-spanks-toys-r-us-for-violation-of-mandated-supplier-communication-practices","status":"publish","type":"post","link":"https:\/\/www.certitrek.com\/nlpa\/blog\/ftc-spanks-toys-r-us-for-violation-of-mandated-supplier-communication-practices\/","title":{"rendered":"FTC Spanks Toys ‘R’ Us For Violation of Mandated Supplier Communication Practices"},"content":{"rendered":"

In 1998, the US Federal Trade Commission (FTC) issued an order against Toys \u2018R\u2019 Us for the retailer\u2019s anti-competitive behavior. According to the FTC, the retailer used the leverage associated with its size to force their suppliers into agreements that would keep those suppliers from \u201cselling certain toys to warehouse clubs, or to put the toys into more expensive combination packages, so consumers could not obtain lower-priced toys from the clubs or compare prices easily.\u201d<\/p>\n

As part of the order, Toys \u2018R\u2019 Us was prohibited \u201cfrom urging any supplier to limit the supply of products or refuse to sell to discounters\u2026bars Toys \u201cR\u201d Us from asking any supplier about its sales to any toy discounter, and requires the company to preserve and maintain records of communications with its suppliers related to its sales and distribution.\u201d Yesterday, the FTC announced a civil penalty of $1.3 million to be paid by Toys \u2018R\u2019 Us for violating the order.<\/p>\n

What got Toys \u2018R\u2019 Us sent to the principal\u2019s office this time?<\/p>\n

Three things, actually. But one of them really kinda bugs me.<\/p>\n

That transgression was that Toys \u2018R\u2019 Us apparently was \u201ccomplaining\u201d to its suppliers about their discounts. The FTC claims that \u201cthese complaints could lead those suppliers to limit supply or refuse to sell their products to toy discounters.\u201d<\/p>\n

Whoa!<\/p>\n

Now, I understand that Toys \u2018R\u2019 Us lost some privileges for its past misbehavior. And the other two violations of the order, which you can read about on the above-linked FTC announcement, I can understand.<\/p>\n

But not being able to complain about discounts to suppliers?<\/p>\n

It\u2019s business. In procurement, complaining about discounts is a big part of what we do and one way we contribute to improved profits.<\/p>\n

But, then again, corporal punishment never feels good now, does it?<\/p>\n

Recommended Reading<\/b><\/p>\n