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Summary of the M-Edge Vs. Amazon Lawsuit
An anonymous reader writes "According to a lawsuit filed by Kindle accessory maker M-Edge, Amazon is a threatening, deceitful, and interfering big brother figure. M-Edge accuses the Kindle maker of patent infringement, contract interference, false advertising, unfair business practices, and extortion. A summary of the lawsuit and events over the course of the last 3 years paints a very dark picture of Amazon's tactics for crushing competition and stealing the best ideas from its partners. It sounds as though M-Edge may have a very strong case against Amazon, and if it wins we could see Amazon forced to remove its own Kindle accessories from Amazon.com."
M-Edge agreed to a long term contract rate with Amazon. Amazon decided they didn't like the contract that Amazon had agreed to, so it used illegal coercion to get M-Edge to agree to a new long term contract that was strictly worse than the old contract.
Its not an issue of the amount of the fee but the method at which it was obtained.
I didn't read all of it... but basically M-edge says:
* Amazon and M-edge signed a 3 year agreement where amazon would receive 8% + an additional 7% = 15% of their sales on Amazon
* about a year past, and amazon demanded and harassed m-edge to sign a new agreement where amazon would receive 32%. amazon threatened to delist m-edge from amazon.
* m-edge eventually agreed to the new agreement
* an additional period of time passed, and amazon demanded that m-edge sign a new contract where they would receive an additional 30% (or so) + 10% of all of m-edges sales to other retailers or they would be delisted.
* m-edge refused
* amazon sent out an 'approved kindle accessories manufacturers' list to m-edges retailers that did not include m-edge
* retailers called medge to ask about the list, and medge lost business, and some retailers stopped ordering
* medge continues to refuse to sign a new agreement.. amazon says medge breached prior agreement and terminates the agreement.
medge also says amazon infringes on one of their patents... and that amazon lists medge's products as unavailable (where they should not be listed at all) and suggests amazon's own accessories instead.
there's some other stuff about amazon withholding payments, etc... but the above is basically it.