NEWARK, N.J. -- Toys R Us Inc. and two toy manufacturers will pay $50 million in toys and cash to settle state claims that the nation's No. 2 toy retailer kept toymakers from selling Barbie dolls, Mr. Potato Head and other popular toys to discount stores.
Toys R Us will pay $40.5 million, while Mattel Inc. and Little Tikes Co. -- which were accused of acceding to the demands of the retailer -- will pay $9.5 million to settle a lawsuit joined by attorneys general in 44 states, the District of Columbia and Puerto Rico. All 50 states will share in the settlement.A third toy maker, Hasbro, agreed to pay $5.9 million to settle the same lawsuit last year.
Utah will receive $243,129 in toys and about $90,000 in cash to provide toys and educational products to Utah children and to cover attorneys costs.
"For the toy-buying public this is a big win that also benefits needy children and worthy children's organizations," said Attorney General Jan Graham in a statement. "The agreement will ensure both lower toy prices for all consumers and penalties for these companies' collusive agreements."
The lawsuit, filed by New York state in 1997 and joined by the others later that year, followed a 1996 complaint by the Federal Trade Commission charging that Toys R Us illegally used its size and clout to get the toymakers to stop selling to discount chains, cutting out its competition and artificially raising prices.
The states' lawsuit accused Mattel and the other toymakers of restricting the supply of toys like Barbie Dream House, Firehouse Blocks and Fisher Price nursery monitors.
Toys R Us, based in Paramus, N.J., has admitted the practice but said it did nothing wrong and is still appealing the FTC complaint. But the company said it decided to settle the lawsuits with states to avoid a lengthy, costly legal battle.
"We believe that this settlement is in the best interests of the company and our customers, and we are happy to have this matter settled with children as the beneficiary," spokeswoman Rebecca Caruso said.
Toys R Us was the nation's largest retailer until it was dethroned this year by discount giant Wal-Mart Stores Inc. Toys R Us was forced to cut 3,000 jobs last year and begin reorganizing its stores to turn around a string of bad earnings results.
The toy companies admitted no wrongdoing under the settlement. Los Angeles-based Mattel, the world's largest toymaker, agreed to pay $8.2 million in cash and toys, while Little Tikes, based in Hudson, Ohio, agreed to pay $1.3 million.
Those companies did not immediately return calls seeking comment.
Toys R Us agreed to donate $9 million in toys a year for the next three years in the 50 states, the District of Columbia and Puerto Rico through the U.S. Marine Corps' "Toys for Tots" program. Pending court approval, the first toys could arrive this Christmas.
Some $26,535 in toys were distributed through Utah's Toys for Tots program during the 1998 Christmas season as a result of the earlier settlement with Hasbro.
Toys R Us also agreed to pay $13.5 million in cash to the states.