RealTime IT News

Does Expedia Need Amazon?

Online retail giant Amazon.com is making some waves in the travel sector, filing suit against Expedia for alleged non-payment of about $3.7 million in connection with the travel site's placement on Amazon.

Bellevue, Wash.-based Expedia was mum on the lawsuit, in which Seattle-based Amazon claimed Expedia refused to pay up unless the contract was renegotiated.

Amazon launched a travel store in conjunction with Expedia last Sept. 26. Hotwire and National Leisure Group's The Vacation Store were also part of the deal. However, the Expedia deal was signed in May of 2001, when Expedia was less of a Web presence.

The idea was a one-stop travel shop for Amazon customers. As usual, the financial terms were not disclosed at the time, but apparently they involved fixed payments as opposed to revenue sharing.

Expedia's Web travel business has since soared, and the travel site may feel it no longer needs exposure on Amazon.

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, Reuters reported.

The suit says Expedia had agreed to pay Amazon $16 million in 12 quarterly installments for featuring Expedia's travel services

After paying an initial $3.33 million, Expedia allegedly failed to pay $3.66 million due since February of this year, Amazon said. Amazon is suing for that amount plus interest, attorney fees and expenses.

As of this morning, Expedia was still listed as a featured partner in the Amazon travel store.

Amazon's other travel partners apparently are up to snuff on their agreements.

Amazon said that it has extended its deals with the other original partners in the travel store -- discount travel operation Hotwire and National Leisure Group's The Vacation Store. Financial terms of these deals were not disclosed.