Amazon.com Accused of Sabotage in Lawsuit Filed by Kindle Accessory Maker

6:06 AM PST 12/29/2011 by Erin Carlson

The small Maryland-based company M-Edge Accessories accuses the e-tail giant of bullying it out of business.

Amazon.com is being sued by one of its merchants for allegedly sabotaging its business, reports the Wall Street Journal.

In a lawsuit filed last Thursday in Maryland federal court (via Gawker), M-Edge Accessories -- which makes cases for Kindles and other e-reader devices -- accused Amazon of unfair competition, and burying it into submission on the Web site. M-Edge, a small company based in Maryland, said the online retail giant had agreed in a November 2009 partnership deal to a 15 percent commission for selling Kindle cases but later requested 32 percent; if M-Edge did not comply, then Amazon threatened to pull the products from its e-shelves. According to the suit, M-Edge declined and Amazon responded with a threat to hide the company in internet search results so that it wasn't visible. That tactic worked: M-Edge, whose revenue came mainly from Amazon (a whopping 90 percent), paid the e-tailer an extra $6.5 million to remain in the marketplace.

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But, ay, here's the rub: M-Edge claimed Amazon erased it from the site, erroneously marking its products as unavailable, then began selling its own version of the company's patented Kindle cases. (An Amazon spokesperson told the Wall Street Journal it would not comment on ongoing legal matters.)

According to reports earlier this month, Amazon was being courted by Hollywood studios to expand the UltraViolet digital content locker technology, which is supported by a range of entertainment, consumer electronics and tech firms, to Amazon’s Kindle Fire tablet, which could put pressure on rivals to follow suit and accelerate the adoption of UltraViolet.

 

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