Amazon accused of extortion

M-Edge Accessories, which makes cases for the Kindle, has accused Amazon in a lawsuit of acting like a corporate bully.

M-Edge says that Amazon demanded higher-than-agreed commissions, threatened to downplay its products on the site and infringed its patents to make a competing case.

“Amazon… repeatedly sought to hijack the product through threats, deceit, interference with M-Edge’s customer relationships, and patentinfringement,” reads the suit, filed in a Maryland federal court.

According to M-Edge, an initial agreement to pay seven percent commission – a deal which M-Edge says was scheduled to run through 2012 – was abruptly hiked when Amazon demanded another 25 percent on top.

“Amazon executive Jay Marinealso threatened to remove – ‘de-list’ – M-Edge from,unless M-Edge became a direct seller to Amazon, something which M-Edge was reluctant to do, given its small size and Amazon’s refusal to commit to minimum volumes,” claims the suit.

M-Edge also claims that Amazon threatened to play with its product pages to ensure that M-Edge products were hard to find, and tried to jeopardize its relationships with other retailers.

And the launch of the Kindle 3 made matters worse, says M-Edge. The company had only a day to play with the device before the launch, giving it no time to create new accessories. And this was the point at which Amazon launched its own lighted jacket and, says M-Edge, started knocking off its most popular jacket covers.

M-Edge wants compensation, an injunction barring Amazon from infringing its patent and punitive damages.