Amazon.com Inc. sued Expedia Inc. on Friday, saying that the Web-based travel firm had failed to pay the No. 1 online retailer $3.7 million due as part of a contract signed last year.
A spokesman Expedia had no immediate comment.
In a complaint filed with the Superior Court of King County, Washington, where Expedia and Amazon
both have their headquarters, Amazon said that Expedia breached the contract by “refusing to pay the amounts owed to Amazon.com unless Amazon.com renegotiated” its agreement to offer Expedia’s services, according to a copy of the complaint obtained by Reuters.
As part of its agreement, signed in May 2001, Expedia
had agreed to pay Amazon $16 million in 12 installments for featuring Expedia’s travel services on its virtual travel “store”, Amazon said in the filing.
After paying an initial $3.33 million, Expedia had failed to pay $3,666,666.68 due since February of this year, Amazon said. Amazon is suing for that amount plus interest, attorney fees and expenses.
Amazon unveiled its partnership with Expedia, the largest U.S. online travel agency, in September of 2001 to offer a service where “customers can find a wide variety of unsurpassed travel deals and discounts.”
As of Friday afternoon, Expedia’s services were still being offered on Amazon’s Web site and the online retailer said it had no immediate plans to shut down the travel store.
“We still think those product offerings are of interest to our customers,” said a source close to Amazon.
“There are no plans at this stage to take down the site and we certainly hope Expedia will honor their obligations,” the source said.
In a separate announcement on Friday, Amazon said it would extend its partnership with the National Leisure Group to continue to provide its cruise vacations on Amazon’s travel store. A similar agreement with low-fare travel company Hotwire was also extended, Amazon said.
Friday’s filing would not affect a similar relationship between the U.K. subsidiaries of Amazon and Expedia, the source close to Amazon said.
Related stories on ITN:
(08/10/2001) Amazon to sell travel through Expedia