Wayne, N.J. Toys “R” Us is being investigated by the Federal Trade Commission for alleged antitrust violations, according to a report by the Wall Street Journal on Saturday.
The retailer is facing an FTC probe into whether it used its market clout to stifle discounting by competitors and force consumers to pay higher prices for baby products.
Specifically, the FTC is looking into whether Toys “R” Us breached an 11-year-old FTC order to abstain from anti-competitive practices, WSJ said.
Toys “R” Us had agreed to the order in 1998, after an administrative law judge found it had forced major toy manufacturers to sell only so-called "value packs" of several toys or discontinued items to discount warehouse clubs such as Costco Wholesale Corp. Those practices prevented consumers from comparing prices and the quality of products and curtailed the effectiveness of the clubs as competitors, the FTC charged.
It was unclear whether the current probe would result in any enforcement action, the newspaper said; however, Toys “R” Us could face a fresh FTC complaint for allegedly attempting to fix prices of strollers, high chairs, car seats and breast pumps sold at Babies “R” Us, said the report.
FTC investigators are expected to review e-mails between Babies “R” Us and manufacturers.