Toys `R' Us settled a lawsuit with customers who had accused the biggest US toy retailer of violating the privacy of its Web-site visitors by disclosing consumer data to an outside marketing company.
The company will pay up to US$900,000 in legal fees to settle the suit and agreed to appoint a committee to review its privacy policies as part of the settlement.
The class-action suit had sought hundreds of millions of dollars on behalf of visitors to the retailer's Web site.
As a part of the settlement, Toys `R' Us will ask CoreMetrics Inc to destroy data the outside Web site usage-tracking company held.
The Burlingame, California-based company also agreed to institute policies to protect data collected online and pay up to US$400,000 in legal fees.
"We are pleased with this outcome because it clearly supports our business practices surrounding the protection of online consumer privacy," CoreMetrics Chief Executive Scott Kauffman said in an e-mailed statement.
Toys `R' Us spokeswoman Rebecca Caruso didn't immediately return a phone call seeking comment after hours.
The settlement is subject to court approval, the companies said in a statement.
CoreMetrics and Toys `R' Us didn't admit any wrongdoing as part of the settlement, according to court papers.
Customers filed lawsuits against the companies in the summer of 2000.
The class of plaintiffs included visitors to the Toys `R' Us Web site from June 1, 1998 to Aug. 6, 2000.
Toys `R' Us entered into an alliance with Amazon.Com to run the Web site later that month as it sought to cut losses from its Web business.
The toy retailer manages the merchandise and inventory for the Web stores.
Amazon.com operates the site and manages the ware-houses.
Shares of Paramus, New Jersey-based Toys `R' Us rose 61 cents to close at US$10.61.
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