Headlines
US toymaker MGA criticised by UK court for 'retaliatory' action against startup
Published by Global Banking & Finance Review®
Posted on June 16, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 16, 2025
2 min readLast updated: January 23, 2026
UK court criticizes MGA for abusing market power against Cabo Concepts, impacting toy industry competition with L.O.L. Surprise! dolls.
LONDON (Reuters) -U.S. toy supplier MGA Entertainment abused its dominant position to try to block a new market rival by threatening to withdraw its own popular L.O.L. Surprise! dolls from British retailers, London's High Court found on Monday after a bitter legal battle.
California-based MGA – which is a major supplier of toys to U.S. firms Walmart and Target and also owns the Bratz dolls brand – was sued in 2020 by startup Cabo Concepts.
Cabo alleged MGA stifled the launch of Cabo's Worldeez range by asserting that the toys' globe packaging was an imitation of MGA's L.O.L. Surprise! and threatening to withhold supplies of L.O.L. Surprise! to retailers that stocked the Worldeez globe.
The Worldeez toy ultimately failed and was discontinued in 2018, prompting Cabo to sue MGA, seeking up to 90 million pounds ($122 million) in damages for lost profits.
Judge Kelyn Bacon on Monday rejected Cabo's argument that it would have traded profitably but for MGA's conduct, saying in a written ruling that "Cabo's claim for damages therefore fails".
The judge did, however, find that MGA had abused its dominant position by making threats to withdraw the supply of L.O.L. Surprise! dolls, "reinforced by threats of litigation and disparaging claims that Worldeez was a 'knock off'".
Bacon also said that MGA made "unjustified threats of patent infringement proceedings" to major retailers Toys 'R' Us, The Entertainer and Smyths.
MGA took "retaliatory anti-competitive action" against Cabo in an attempt to "stifle legitimate competition by exercising its market power to cut off the main retail outlets", she added.
MGA did not immediately respond to a request for comment outside U.S. office hours. Cabo could not be reached for comment.
(Reporting by Sam Tobin; Editing by Kevin Liffey)
Cabo Concepts alleged that MGA abused its dominant position by threatening to withdraw its L.O.L. Surprise! dolls to block Cabo's Worldeez range.
The court found that MGA had indeed abused its dominant position by making threats to withdraw supplies and issued unjustified threats of patent infringement.
The judge rejected Cabo's claim for damages, stating that their argument that they would have traded profitably but for MGA's conduct failed.
The Worldeez toy ultimately failed and was discontinued in 2018, leading Cabo to seek damages from MGA for lost profits.
MGA's threats of litigation and disparaging claims affected major retailers like Toys 'R' Us and The Entertainer, as they were caught in the crossfire of the dispute.
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