Report: Feds investigate Toys R Us over pricing

updated 2:57 p.m. ET Oct. 18, 2009

NEW YORK - The federal government is reportedly investigating whether Toys R Us Inc. has improperly acted to discourage discounting and keep the prices consumers pay on baby products such as strollers and car seats higher than they otherwise may have been.

The Wall Street Journal reported Saturday that the Federal Trade Commission is examining whether the nation's biggest toy store chain violated an 11-year-old FTC order that it avoid anticompetitive tactics that could stifle competition and keep prices high.

The newspaper cited unidentified people familiar with the matter and added that it was unclear whether the probe would result in any enforcement action.

Calls and e-mails Saturday to two public relations executives for the Wayne, N.J.-based retailer were not immediately returned. A message was left with the FTC, but that call was not immediately returned.

Toys R Us consented to the FTC order in 1998, the newspaper said, after an administrative law judge ruled that it had illegally exercised its market power with toy makers by threatening to stop selling toys also being sold by the discount retailers.

The newspaper said that FTC investigators are expected to review more recent e-mails exchanged among Toys R Us' Babies R Us division and manufacturers involving whether rival retailers had agreed to charge the manufacturer's suggested price for various products.

Some of the e-mails have been filed in connection with ongoing class-action cases alleging price-fixing by Babies R Us, according to the Journal report.

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