Legal

In its struggle against surging online retailers such as Amazon.com, Wal-Mart has unleashed a weapon long shunned by Sam Walton: lobbying. On July 24, the U.S. House of Representatives Judiciary Committee will hold a hearing on a bill to let states collect sales tax from out-of-state merchants that sell to their residents. If passed, online retailers, which now mostly don't collect sales tax, will lose a price advantage that's helped them take business from brick-and-mortar stores.

Three former managers at Wet Seal, a nationwide apparel retailer for young women, filed a federal race discrimination lawsuit last week, asserting that the company had a high-level policy of firing and denying pay increases and promotions to African-American employees because they didn't fit its "brand image."

A state judge on Friday temporarily blocked plans by Martha Stewart Living Omnimedia to sell certain branded products at J.C. Penney stores. The preliminary injunction was a win for Macy's, which has sued Martha Stewart Living claiming it has exclusive rights to sell certain Martha Stewart products including soft furnishings, dinnerware and cookware.

Visa and MasterCard agreed to pay retailers $6 billion to settle a price-fixing lawsuit that alleged they overcharged companies billions of dollars in credit card transaction fees. The agreement is believed to be the largest settlement ever of a private antitrust case, according to lawyers for 7 million American merchants who sued the card companies in 2005. The total value of the agreement is $7.25 billion, counting a temporary reduction in card fees.

Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times' Barney Jopson reports that Amazon's tax capitulation is part of a major shift in the company's operations.

Yes, you can get arrested for selling coupons on eBay — if they're counterfeits, that is. Three women were arrested in Arizona for selling counterfeit coupons online, according to the Coupon Information Center (CIC). A press release issued by the organization said the case demonstrated the dangers of purchasing coupons on the internet, and said buyers may also expose themselves to additional risk by providing their names, home addresses and financial information to organized crime rings. 

Online shopping in some states is about to become more expensive. A wave of states have passed laws that will require consumers to pay sales tax on all internet purchases as soon as next year. Other states and the District of Columbia are pursuing similar measures. And in Maryland, Gov. Martin O'Malley wants to go further and levy a tax on songs and other digital products bought through popular sources such as iTunes.

Filing Chapter 11 isn't always the end: both companies (and individuals) have bounced back from bankruptcy, in some cases to move on to remarkable success. But for Strauss Auto, bankruptcy came to seem less like a chance to reorganize and more like a habit it couldn't break. Strauss Auto's Chapter 11 filing last month was its fifth since 1979, and it was accompanied by the closing of its remaining 46 auto parts stores and the intention of filing a plan of liquidation, according to the Wall Street Journal and other published reports. 

White House officials have agreed to meet with members of the retail industry to discuss issues associated with implementation of the health reform law, responding to the industry's July 2 letter urging the administration to immediately release “long overdue” regulations that would allow employers to move forward on the law's requirements. The most important policy issue for retailers is clarification of how the administration intends to define a “full-time employee,” said officials with the Retail Industry Leaders Association. 

Texas joined eight other states in taking legislative action by requiring online-only retailers, notably Amazon.com, to collect state sales tax. Online retailers began collecting sales tax in Texas on July 1. “A true free market is devoid of government preferences and special treatment," said Sandy Kennedy, president, Retail Industry Leaders Association. "Texas has made a powerful statement that it's time to end special treatment for online retailers and close the sales-tax loophole that gives companies like Amazon an artificial leg up on Main Street retailers."