Tundra has filed a suit against one of the biggest players in the digital B2B marketplace – and that major player is firing back. Faire filed its own suit against the small marketplace operator on the same day.
Though the suits were originally filed back on May 23, details are just now coming into the forefront. Tundra, which announced in July it was shutting down its operations, filed suit against Faire claiming it engaged in “anticompetitive conduct, unfair policies” and violated federal antitrust regulations.
In its own suit, Faire claimed Tundra had accessed its computer network illegally and continued to do so despite demands for it to stop.
According to a report from Business of Home, Tundra’s suit alleges Faire “acquired its monopoly market position by deploying unfair, anticompetitive, and exclusionary tactics that have thwarted competition from other actual and would-be market participants and harmed the Brands, Retailers, and consumers that Faire claims to serve—all in violation of the Sherman Act and California law.” The suit was filed in the U.S. District Court in San Francisco for the Northern District of California.
The suit continues on, alleging Faire holds 90 percent of the market share for online wholesale marketplaces for independent retailers, but says it did not achieve such majority “by offering a superior product, better pricing, or more attractive terms and conditions.”
Several B2B marketplaces made way onto the scene over the past few years to provide an alternative to in-person markets. While some are associated with physical events, many are free-standing platforms. And despite having an increased impact during the pandemic, none have come close to being a full substitute for in-person shows. In fact, most major shows have returned to or neared pre-pandemic attendance marks.
Faire launched in 2017 and is home to more than 100,000 brands with 700,000 retailers buying through the platform. Tundra’s website said it hosted 10,000-plus brands with 30,000-plus verified retailers.
Tundra’s business model relied on paid advertising, a factor that the suit claims “threatened” Faire’s model with commission charges. In response, Faire “implemented and exploited exclusionary agreements with Brands and Retailers to block rivals from gaining a foothold in the market,” the suit claims.
In its own suit filed in the same California court, Faire claims Tundra’s operation “interfered with Faire’s business and contractual agreements, including by inducing Faire’s users to breach their agreements with Faire in order to use Wholesale Co-Op, and by causing Faire users to be locked out of their accounts or otherwise creating turmoil and customer confusion that Faire must respond to” and that Tundra accessed its data by “scraping the Faire platform.”
When Tundra announced its closure in July, it placed the blame solely on Faire saying in a release that the company “simply cannot remain a viable concern in the face of the anticompetitive conduct, unfair policies, and the punitive enforcement of exclusive arrangements by our direct competitor, Faire Wholesale, Inc.”
Faire issued a statement to Business of Home: “These desperate claims have no merit, and are a defensive attempt to retaliate against Faire’s own complaints regarding Tundra’s harmful practices. We look forward to resolving the matter swiftly, and remain committed to giving small business owners around the world the tools and technology they need to compete and succeed.”
Tundra is seeking injunctive relief, compensatory damages and compensatory costs. Faire is asking for similar compensation; neither suit specifies a monetary amount.