January 25, 2000
FOR IMMEDIATE RELEASE
ETOYS FINALLY DROPS LAWSUIT, PAYS COURT COSTS
Waited a month to make good on promise, just in time for earnings report
Contact: etoyfund@rtmark.com
More information: http://rtmark.com/etoypress.html,
http://rtmark.com/etoy/, http://toywar.com,
http://rtmark.com/shell,
http://www.etoys.com/cgi-bin/... (Nazi toy)
Four weeks ago, Internet toy giant eToys announced to the press that it
was "moving away" from its lawsuit against European art group etoy in
response to the torrent of public outrage. As the weeks went by without
further action, however, many activists decided that eToys' words had
represented a typical corporate ploy to derail opposition, and that the
company had no intention of actually dropping the suit.
Activists quickly renewed their campaigns against eToys. WTO/GATT
initiated two new campaigns to drive eToys' stock price yet further
down (it has now sunk well below its opening value of $20 per share,
after a high of $67 reached the day the protests began), and a new
community platform, http://www.toywar.com, gathered a "toy army" of
1400 activists poised to perform "operations" on command.
The strongest attack to date was scheduled to coincide with eToys'
earnings announcement on Thursday. Today, just in time, eToys
formally dropped its case against etoy "without prejudice"--a phrase
that means either party is still free to attack the other. eToys has
also formally agreed to pay etoy's court costs and other expenses
incurred as a result of the lawsuit.
"A precedent has now finally been set in stone," said WTO/GATT
spokesperson Ray Thomas. "eToys thought it could act like corporations
typically do, but it had no idea how the Internet works. Now e-commerce
corporations have a choice: either obtain a legal stranglehold on the
Internet, so that this kind of defensive reaction is no longer possible,
or behave decently towards the humans who use this medium for purposes
other than profit."
"This is the Brent Spar of e-commerce," said Reinhold Grether, an
Internet researcher and a mastermind of the anti-eToys campaigns. "Just
as the petroleum industry learned it had to listen to environmentalists,
so e-commerce companies have now learned that the Internet doesn't
belong to them, and they can't do whatever they want with it." (See
http://rtmark.com/shell for more about the Brent Spar, and
http://www.hygrid.de/etoyrhiz.html for more comments by Grether.)
"eToys will try to paint this as a misunderstanding, as just a simple
error that has now been corrected," wrote etoy in a prepared statement.
"But this is not what happened. They tried to destroy us, and that got
them into very big trouble. They wanted to drop their case 'with
prejudice,' because they fear further attacks and trademark battles,
but now they see they have no choice at all in the matter. It is a
total victory."
WHAT NOW?
Even though etoy has recovered its domain, the etoy Fund will not be
retired, said WTO/GATT spokesperson Thomas. Each project's discussion
board will continue to function, and the resources of the etoy Fund
pages will continue to be accessible for use and research.
"We hope that this campaign continues to serve as a reminder to people
of what corporations do when left to their own devices, and as a
reminder to corporations of what they cannot do, at least on the
Internet," said Thomas. "We also hope people continue expressing their
anger at eToys, if they so choose. There are many ways to embarrass and
further damage this company--the Nazi figurine eToys advertises could lead
to a boycott by Jewish groups, for example."
Another immediate option would be a class-action lawsuit by eToys
investors, said lawyer and WTO/GATT member Rita Mae Rakoczi. "It could
convincingly be argued that eToys, being an Internet company, should
have known what it was getting into, and has seriously mismanaged its
stockholders' money. If etoy's possession of etoy.com is so dangerous--
as perhaps it really is--why didn't eToys choose a different name for
the company when they had the chance? And why did they choose to pursue
in an openly hostile manner an art group best known for a piece called
the 'Digital Hijack,' which made sophisticated use of technology to
playfully attack users' browsers? It wouldn't take an Einstein to
predict trouble."
"If eToys stumbled into this through sheer stupidity and negligence,"
Rakoczi continued, "it could be liable to investors for part of the $4
billion in value that's been lost as a consequence. A successful
lawsuit could even entail eToys losing its own trademark, which would
likely mean the end of the company." WTO/GATT has set up a page
containing links to resources on class action lawsuits against
corporate managements (http://rtmark.com/etoysclassaction.html).
"Things on the Internet don't go away," said etoy in its statement.
"'Brick and mortar' corporations do this sort of thing and then bury
it--but this will always be there when you search for information on
eToys. It will always be very visible what bastards they were. They can
never recover from this." The 1400 "Toywar soldiers" mustered by
http://www.toywar.com will remain on high alert, according to the
platform's operators, and are prepared to spring into action at the
slightest indication of further aggression by eToys.
"And Network Solutions had better be careful, too," etoy said. "We will
not tolerate any delay in the reinstallation of the etoy.com DNS
entries." Network Solutions, the company in charge of Internet domains,
illegally terminated etoy's e-mail shortly after the November 29
injunction, although no such move was required by the order. (See
http://rtmark.com/etoyvaticano.html for another example of illegal
behavior by Network Solutions.)
BACKGROUND AND TIMELINE (see also http://rtmark.com/etoy.html)
Late last year, eToys attempted to buy etoy.com from European art group
etoy, and offered upwards of $500,000 in cash and stock options for
the domain. etoy turned down the offer, so on November 29, 1999, eToys
obtained a court injunction preventing etoy from operating a website at
www.etoy.com, which had been registered before eToys even existed. To
obtain the injunction eToys told the judge that etoy.com was confusing
customers, and furthermore that it contained pornography and calls to
violence. etoy.com had never made any reference to eToys or toys, nor
featured anything resembling pornography or calls to violence.
During the subsequent weeks, activists attacked eToys by a variety of
means that have been widely credited with contributing to the 70%
decline in the value of eToys stock--a decline that began the same day
as the protests.
The Dec. 15-25 Virtual Sit-in crippled the eToys servers, as CNN
reported, and
prompted eToys to file a restraining order against one of the
organizations responsible for it, and to threaten another activist
anonymously.
Simultaneously, the Disinvest! campaign filled eToys investment boards
and other outlets with messages about the situation. Many investors
responded by dumping their eToys stock. Even those who refused to see
a link between activist attacks and the eToys stock fall were at a loss
to explain how it could lose so much money, so consistently, on
consistently good financial news. Some suspected foul play by eToys
management, and the possibility of a class-action lawsuit was raised.
Finally, on December 29, eToys announced it was "moving away" from its
lawsuit in response to public outrage. At first, etoy and the activists
were delighted, and a formal counterpart to the statement was expected
from hour to hour. Then, when nothing happened for days and then weeks,
it became clear that eToys' announcement had been an empty verbal
concession it had no intention of making concrete--a typical corporate
ploy to derail activist momentum.
Activists quickly renewed their campaign to damage eToys. Perhaps
startled by the endurance of its opponents, and nervous about further
attacks and proof of instability during the week it is to announce its
quarterly earnings, eToys today--at 15:20 Pacific Standard Time, to be
exact--finally backed down on paper, ceding full rights to etoy.com on
etoy's terms, without precondition and with payment of court costs and
other expenses.
WTO/GATT, which is in no way associated with etoy, aims to publicize the
widespread corporate abuse of democratic institutions like courts and
elections. To this end it solicits and distributes funding for
"sabotage projects." Groups of such projects are called "mutual funds"
in order to call attention to one way in which large numbers of people
come to identify corporate needs as their own. WTO/GATT projects do not
normally target specific companies; the etoy Fund projects are an
exception.