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Amazon.com Takes Legal Action Against Cybersquatter

Allegations Cite a Pattern of Racketeering Activity

SEATTLE-August 18, 1999 --/PRNewswire/-- Leading online retailer Amazon.com, Inc. (NASDAQ: AMZN) filed a lawsuit today against cybersquatter Greg Lloyd Smith and his affiliated companies alleging violations of the federal Racketeer Influenced Corrupt Organization (RICO) statutes, trademark infringement, trademark dilution and copyright infringement, among other federal and state law claims. The suit was filed in the United States District Court for the District of Delaware. The complaint alleges that Smith and his codefendants engaged in extortion, mail fraud, wire fraud, and criminal copyright violations that form a pattern of racketeering activity.

Smith and his wife, Aikaterini Theochari, who live in Greece, are personally named in the suit, as are two of Smith's companies, CITI Services, Inc. (a holding corporation organized under the laws of Delaware in the United States) and CITI Services Limited, an English corporation.

The lawsuit arises from what the complaint alleges was a "thinly veiled shakedown" attempt of Amazon.com, Smith's operation of a website copied from Amazon.com's innovative and internationally recognized e-commerce site, and Smith's use of the domain names "amazon.gr" and "amazon.com.gr." According to the complaint, the defendants are holding themselves out as "Amazon.gr, Greece's Biggest Bookstore" to trade upon the success that Amazon.com has achieved in establishing itself as the leading e-commerce company, which does business only on the Internet.

"Amazon.com, as an innovator and leader in the world of e-commerce, unfortunately has become a target for those willing to engage in unscrupulous business practices," said Bill Curry, spokesman for Amazon.com. "What makes e-commerce work for our more than 10.7 million customers around the globe is that it truly is a World Wide Web. We're open around the clock and around the globe, offering millions of books and other products at great prices. We take it seriously when someone engages in unfair business practices and tries to pass himself off as connected to Amazon.com, because consumers around the globe have come to trust our name and the service we provide."

Curry added, "With this lawsuit, we're putting other Amazon.com copycats and cybersquatters on notice: You can run, but you can't hide."

In its 11-count complaint, Amazon.com is seeking treble damages and an injunction preventing Smith and his affiliates from using the infringing domain names and Website. Among the allegations in the complaint:

 

  • The defendants contacted Amazon.com on May 3, 1999, and informed the company they were using the name Amazon Greece and offered to sell a controlling interest in CITI to Amazon.com for $1,632,000. The complaint alleges that "after Amazon.com refused to comply with this thinly veiled shakedown, Amazon.com learned the defendants were using the term Amazon.gr as part of a Web site to encourage consumers to purchase books and other products from CITI," at the expense of Amazon.com.
  • The defendants "expressly instructed their Web site developer to base their Web site...on Amazon.com's" internationally recognized site, and used the Internet to "cut and paste portions of Amazon.com's Web site" into their own, according to the complaint.
  • "Defendants have been and continue to engage in a scheme or artifice to defraud and to obtain money by means of false pretenses and representations," the complaint says. "In furtherance of [this] scheme to connect its products and services to Amazon.com, to damage Amazon.com's goodwill, and to defraud Amazon.com's customers, defendants have committed multiple violations of the mail and wire fraud statutes."
  • "Fraudulent acts of mail and wire fraud, extortion and criminal copyright infringement constitute a pattern of racketeering," the complaint says, "and pose a threat to society."

Amazon.com earlier filed a lawsuit against Smith and his affiliates in Greece, where he operates the offending website. A hearing has been scheduled in that matter for September 16.

On a worldwide level, a June study of all global brands by Interbrand Newell and Sorrell ranked Amazon.com as the 57th most valuable brand worldwide, just above Hilton, Guinness, and Marriott, and just below Pampers. Also in June, PC World Magazine named Amazon.com the Best Shopping Web Site. "E-commerce as it should be," said the magazine.

About Amazon.com, Inc.
Amazon.com, Inc. (NASDAQ: AMZN), the Internet's No. 1 music, No. 1 video, and No. 1 book retailer, opened its virtual doors on the World Wide Web in July 1995 and today offers Earth's Biggest SelectionTM with online auctions, toys, electronics, free electronic greeting cards, and more than 4.7 million book, music-CD, video, DVD, and computer-game titles. Amazon.com seeks to be the world's most customer-centric company, where people can find and discover anything they may want to buy online. As part of its efforts to provide the best shopping experience for customers, Amazon.com provides secure credit-card payment, personalized recommendations, streamlined ordering through 1-ClickSM technology, and hassle-free auction bidding with Bid-ClickSM.

Amazon.com operates two international Web sites: www.amazon.co.uk in the United Kingdom and www.amazon.de in Germany. Amazon.com also operates PlanetAll (www.planetall.com), a Web-based address book, calendar, and reminder service. It also operates the Internet Movie Database (www.imdb.com), the Web's comprehensive and authoritative source of information on more than 150,000 movies and entertainment programs and 500,000 cast and crew members dating from the birth of film in 1892 to the present. Amazon.com also operates LiveBid.com (www.livebid.com), the sole provider of live-event auctions on the Internet.

In addition, Amazon.com has invested in leading Internet retailers that are improving the lives of customers by making shopping easier and more convenient: drugstore.com, an online retail and information source for health, beauty, wellness, personal care and pharmacy, at www.drugstore.com; Pets.com, the online leader for pet products, expert information and services, at www.pets.com; HomeGrocer.com, the first fully integrated Internet grocery-shopping and home-delivery service, with operations in Seattle and Portland, Oregon, at www.homegrocer.com; Gear.com, which offers brand name sporting goods at prices from 20% to 90% off retail, at www.gear.com .

This announcement contains forward-looking statements that involve risks and uncertainties that include, among others, Amazon.com's limited operating history, anticipated losses, unpredictability of future revenues, potential fluctuations in quarterly operating results, seasonality, consumer trends, competition, risks of system interruption, management of potential growth, risks related to auction services, and risks of new business areas, international expansion, business combinations, and strategic alliances. More information about factors that potentially could affect Amazon.com's financial results is included in Amazon.com's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 1998 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999.

NOTE: Amazon.com, Amazon.com Auctions, Amazon.co.uk, Amazon.de, Internet Movie Database, PlanetAll, Earth's Biggest Selection, Bid-Click and 1-Click are either registered trademarks or trademarks of Amazon.com, Inc., or its affiliates. All other names mentioned herein may be trademarks of their respective owners.


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