Who knew that hiring out jumping castles for kids' parties could be such a cut-throat industry?

One of Melbourne's biggest party-hire operators has faced allegations of arson, insurance fraud and launching cyber attacks on competitors during a committal hearing in the Melbourne Magistrates Court last week.

Awesome Party Hire owner James Balcombe, 53, is accused of inciting and paying two men to torch five rival businesses between December 2016 and February last year.

According to a former employee, Mr Balcombe was desperate to dominate the jumping castle market, which had been flooded by copycats who he accused of stealing his ideas and offering cheaper rates.