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In May 1996, the Commission filed an administrative complaint charging Toys "R" Us with using its dominant position as a toy distributor to obtain agreements from toy manufacturers to stop selling to warehouse clubs the same toys that they sold to Toys "R" Us. After an administrative trial, the ALJ issued an initial decision finding that Toys "R' Us' policy to stop carrying toys made by a manufacturer that sold the same toys to discount club stores had induced manufacturers to agree to stop supplying some toys to club stores in violation of the antitrust laws. In October 1998, the Commission issued its decision that Toys "R Us had orchestrated horizontal and vertical agreements with and among toy manufacturers to restrict the availability of popular toys to warehouse clubs, and ordered the company to stop pressuring manufacturers to limit supply or otherwise refuse to sell to discount club stores. Toys "R" Us appealed to the Seventh Circuit, and in August 2000, the appellate court upheld the Commission's order.
In April 2014, on a petition from Toys "R" Us, the Commission modified its order to set aside certain provisions that restricted the company's ability to enter into certain conditional supply relationships, finding that Toys "R" Us is no longer the largest toy retailer.