Macy’s settles lawsuit to block Amazon billboard advertising

Macy’s has quietly settled a high-profile fight to stop Amazon from advertising on the billboard atop its “world-famous” outpost on New York’s 34th Street. Following the filing of a lawsuit against its Herald Square owner, Rockaway KB Company, LLC (“Rockaway”) in a New York state court in September seeking to terminate an agreement that would allow Amazon to advertise on the billboard, Macy’s and Rockaway appear to have resolved their differences out of court, prompting New York Supreme Court Justice Barry Ostrager to dismiss the case last month .

In a decision and order filed Dec. 15, Judge Ostrager revealed that the preliminary injunction filed by Macy’s to restrain Rockaway from allowing one of its competitors to advertise on the billboard, which had been the site of its own publicity for some 60 years, and “the action as a whole is resolved” pursuant to the waiver without prejudice stipulation that the parties jointly filed with the court in late November.

Macy’s had filed an action “directing Rockaway to disclaim its express intentions to permit a direct competitor of Macy’s to advertise on the billboard located on the land and building…in clear violation of [a] restrictive convent… which prohibits [Rockaway] to authorize the advertising of such a competitor. That competitor was, of course, Amazon. While its right to advertise on the Herald Square billboard expired on August 31, 2021, Macy’s claimed that the expiration of the parties’ agreement did not open the door for Rockaway to put any what advertising on the billboard. As Macy’s claimed in its complaint, a covenant in place since 1963 prohibits its competitors from advertising on the large billboard that surrounds the side of the building that houses the Macy’s store.

The long-standing covenant applies to the land itself, according to Macy’s, meaning it’s not subject to the same expiration as its old agreement with Rockaway.

Allowing a competitor (i.e. “any establishment selling at retail or directly to any customer”) to advertise on the billboard “would not only violate a long-standing covenant” , Macy’s argued, but it would also harm Macy’s “customer goodwill, image, reputation and brand” in an amount that would be “impossible to calculate.”

More than just a fight over a billboard, Macy’s has highlighted the damage it would suffer if Amazon were allowed to stick its ads on the side of the building, arguing that it operates in “a highly competitive and competes with, among others, department stores, specialty and general merchandise stores, manufacturers and discount outlets, and online retailers, including Amazon, Target, Nordstrom, Kohl’s, etc. Macy’s claimed that “the online merchants’ attack on traditional brick-and-mortar stores like Macy’s is real and has been well documented.”

“Macy’s online business grows every year, [and] now more than ever, Amazon and other online retailers are direct competitors to Macy’s,” the retailer explained. “Similar to conquering an enemy, it would be like a competitor hanging their ‘flag’ atop Macy’s flagship department store” – which Macy’s says is “more than [its] flagship store; it is the most recognizable and famous department store in the world, [and] it’s Macy’s “crown jewel” – and “heralded victory”.

The terms of the parties’ settlement have not been made public, but at press time Macy’s trademark still appears on the billboard, suggesting that the resolution may have included a newly negotiated term for the previously expired advertising agreement of the parties.

The case is Macy’s Retail Holdings LLC, et. al., v. Rockaway KB Company, 655669-2021 (NY. Sup.).

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