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. RTMark 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 RTMark 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 RTMark 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 RTMark 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." RTMark 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/etoyline.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.