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December 22, 1999

Mattel Delivers 5,228 More Toys to Iowa in Wake of Antitrust Lawsuit

Early this year Mattel agreed to pay millions in cash and toys nationwide -- but States argued Mattel first provided outdated and impractical toys. Mattel is distributing $4 million more in toys -- $41,000 worth to Iowa.

DES MOINES-- The Mattel toy company has delivered 5,228 more toys for holiday distribution in Iowa to less fortunate children - a supplemental distribution Mattel agreed to after States argued that toys delivered earlier by Mattel were out of date or did not represent the broad variety of toys produced by the company.

Mattel was obligated to provide the toys as a result of an antitrust action by Iowa and 43 other states that concluded last spring. The lawsuit alleged that toy makers including Mattel - under pressure from toy retailer Toys 'R' Us - illegally had restricted sales and supply of their most popular toys to other retailers, especially warehouse clubs.

After several weeks of negotiation with States, Mattel agreed last week to a supplemental nationwide distribution of $3.95 million in toys. Iowa's share is about one percent, over $41,000.

The additional 5,228 toys for Iowa were delivered to the U.S. Marines "Toys for Tots" distribution center in Des Moines late last week. The toys include some of the most popular Mattel products - 1,157 "Friends of Barbie Very Velvet Teresa," 642 "NBA Poster Puzzle Assortments," 498 "Pooh Make and Take Puzzles," and about a dozen other types of toys.

The shipment adds to thousands of toys already provided to Iowa this season by other defendants in the case - especially Toys 'R' Us, which provided about $9 million in toys to the States this season. Toys 'R' Us agreed last May to pay $40.5 million to the States in cash and toys over three holiday seasons starting this year.

Attorney General Tom Miller said the multi-state lawsuit, which was settled May 25 in federal court in Brooklyn NY, alleged that Toys 'R' Us had sought to limit the competitive threat posed by low-margin, low-price warehouse clubs, such as Sam's Club. The suit alleged that Toys 'R' Us -- which sells billions of dollars of toys every year and has about ten stores in Iowa -- used its market power to make illegal agreements with the toy manufacturers to restrict toy types they would make available to warehouse clubs. States argued the result was that toys available to the clubs were more expensive, and that consumers found it hard to compare prices between the clubs and Toys 'R' Us.

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