An accessories company has sued the Internet giant for alleged sabotage, making it the latest in a series of little guys who are calling the retail giant a bully. M-Edge, which sells Kindle covers, has filed a suit in Maryland court for patent infringement, unfair competition, intentional interference with contracts and false advertising. The accessories company claims that Amazon tried to eek a higher cut than originally negotiated, reports Stu Woo in today's Wall Street Journal.
M-Edge claims that it had negotiated to give Amazon a 15 percent cut of all sales in a November 2009 during the course of a 3-year contract. Two months later, Amazon wanted 35 percent cut and threatened to removed M-Edge's offerings from the site if it didn't comply, forcing the company, with 90 percent of its profits coming from Amazon.com sales, to pay $6.5 million in fees.
"This case presents a classic example of unlawful corporate bullying,” writes the suit. “M-Edge developed a very successful product line: personal electronic device jackets with multiple features for the Kindle and other e-readers. Amazon thereafter repeatedly sought to hijack the product through threats, deceit, interference with M-Edge’s customer relationships, and patent infringement.”
Hoping to continue winning the Internet, Amazon has had shown us its uglier side. Take that price check app that encourages smartphone owners to examine items in the store and then buy them on Amazon with a five percent discount. We understand where Amazon is coming from -- of course they want to make more money. We understand the allure of a deal just as well as anyone else. But, some bookstores have pointed out that their small customer bases pose no threat to the Internet superstore.
Then there's alleged abuses on the employee side. For both seasonal and more permanent workers, Amazon reportedly takes advantage of its employees. And on a bookselling side, with its "Netflix for books" lending services, publishers feel financially bullied, blaming the e-retailer for devaluing books.
Big companies trying to make money don't have to worry about getting grounded for being meanies on the playground. But, like bullies before and after, they do have to live with their reputations.