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Amazon.com, Wal-Mart Settle Lawsuit

April 5, 1999

NEW YORK (AP) _ Amazon.com and Wal-Mart Stores are settling a lawsuit charging that the online bookseller hired computer system managers away from Wal-Mart to steal the retailer’s trade secrets.

The suit, filed last fall, had charged that Amazon.com targeted the employees as well as Wal-Mart’s software vendors to learn more about the retailer’s information systems, which include data on sales, inventory and consumer buying habits.

In the settlement announced today, Amazon.com agreed to reassign some of the former Wal-Mart employees to jobs that don’t mirror the positions they held at Wal-Mart. Amazon.com also said it would return Wal-Mart information brought by the former employees.

An Amazon.com spokesman, Bill Curry, said the information referred to ``old papers″ brought by Richard Dalzell, hired by Amazon.com as chief technology officer. He declined to be more specific.

A Wal-Mart spokeswoman did not immediately return a phone call.

No damages are to be paid in the settlement, which does not call for Amazon.com to admit any wrongdoing.

Amazon.com settled the case to avoid costly and prolonged litigation, Curry said. Amazon.com is free to continue to hire Wal-Mart workers without the threat of litigation for two years, he added.

Some analysts say Wal-Mart’s database is only second in size to the U.S. government. Besides tracking raw sales, profit margin and inventory data, the system also documents what products consumers tend to buy together.

A database that extensive could help Amazon.com know which products and services would be most attractive to different customers, facilitating the online retailer’s plant to expand into other areas.

Amazon.com, however, maintains it wasn’t trying to copy Wal-Mart’s strategy.

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