M-Edge Accessories LLC, a partner of Amazon who manufacturers Kindle cases, has filed a lawsuit against Amazon alleging the online retailer has been "sabotaging" their business.
According to the Wall Street Journal, M-Edge filed the suit under the allegation that Amazon "...extorted higher-than-negotiated commissions from the company, threatened to make M-Edge products less visible on Amazon's marketplace and made a competing Kindle case that infringed on M-Edge's patent." The suit was filed on Thursday in Maryland.
M-Edge says they became a partner with Amazon in November of 2009 to sell Kindle cases and accessories, paying about 15 percent in royalty commission fees to Amazon. The original plan was agreed upon and would originally last for three years, however, M-Edge says Amazon demanded a 32 percent commission only after two months and threatened to take M-Edge's products off of their website, reports CNET.
The small Maryland company refused the new rate and alleges Amazon persisted with their threats and bullying, even saying Amazon was threatening to "bury" M-Edge in their search results. On top of the increasing fees, Amazon also asked for an extra seven percent in payment for listing M-Edge's products as "official" Kindle products.
M-Edge currently attributes 90 percent of their business to Amazon sales and because of this they finally agreed to the terms and paid out $6.5 million in commission fees. However, after paying the huge price, M-Edge says Amazon started to infringe on their patents for Kindle cases with built-in lights by creating their own and selling them on their website. Also, Amazon apparently started to list M-Edge made cases as "unavailable" while not listing their products at all and falsely leading customers to the Amazon created "copycat" cases.
The Huffington Post says Amazon has not yet commented on the lawsuit. The suit is seeking out damages and a permanent injunction against Amazon.
Meanwhile, the Kindle--most notably the Kindle Fire--is Amazon's top selling product, though exact numbers of units sold have not yet been revealed by Amazon.