Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Capacitor manufacturers allegedly conspired to allocate markets, fix prices, (Oct 9, 2014)

By Greg Hammond, J.D.

In Home Tech Solutions, Inc.—a Minnesota based television repair company—has alleged that 26 high capacitance capacitor manufacturers have engaged in a conspiracy to allocate markets and to fix prices of capacitors sold directly to customers in the United States. According to a complaint filed in the federal district court in San Francisco, In Home seeks to represent all persons and entities that directly purchased capacitors or circuit boards containing capacitors in the United States from the named defendants and their subsidiaries (In Home Tech Solutions, Inc. v. Panasonic Corp., Case No. 3:14-cv-04514).

Capacitors are electronic components used to store and regulate electrical energy and current flow. The components are used in most circuit boards and have applications in automotive systems, cellular phones, communication systems, data processing equipment, defense and aerospace systems, personal computers, power management systems, and essentially any product that uses electricity from batteries or an electric outlet. There are typically two types of high-capacitance capacitors: electrolytic capacitors and supercapacitors.

According to In Home, the capacitor industry is a multi-billion dollar industry. The company alleges that, in fiscal year 2013, global revenue for capacitors was $17.9 billion, with 1.59 trillion units sold. However, global revenue for all capacitors is expected to reach $23.3 billion by 2018, In Home asserts. Nevertheless, it was alleged that over the last ten years, the demand and profits in the capacitor business began to decline, and that the defendants agreed on or before January 1, 2005, to eliminate price competition and to allocate markets for capacitors with the goal of fixing, raising, maintaining, and/or stabilizing prices.

In Home also noted that, in 2014, the U.S. Department of Justice, China’s National Development and Reform Commission, the European Commission, the Japanese Fair Trade Commission, and the Korean Fair Trade Commission initiated investigations into anticompetitive practices in the capacitor market. The company alleges that the defendants and their subsidiaries have a history of engaging in anticompetitive conduct, citing other electronic product cases, including In re: Cathode Ray Tube (CRT) Antitrust Litigation and In re: Lithium Ion Batteries Antitrust Litigation.

The conspiracies alleged in the CRT, Lithium Ion Batteries, and the instant capacitor case, all have similar features, stated In Home, including: (1) a concentrated market dominated primarily by Asian companies; (2) significant barriers to entry; (3) inelastic demand for the products at issue; (4) standardization or commoditization of products; (5) common membership in trade associations that allow the defendants to exchange competitive information; (6) pricing behavior that is inconsistent with a competitive market; and (7) a criminal investigation which resulted in guilty pleas by one or more defendants in each of those cases.

The complaint asserts that the defendants—including Panasonic Corp., Sanyo Electric Co., Ltd., AVX Corp., and others—entered into an illegal contract, combination, or conspiracy to raise and maintain prices, and allocate markets, for capacitors. Consequently, In Home argues that it and members of the proposed class paid higher prices for capacitor and capacitor products than they would have paid in a competitive market. In Home seeks damages and injunctive relief.

Attorneys: Bruce L. Simon, Aaron M. Sheanin, Benjamin E. Shiftan, Michael H. Pearson (Pearson, Simon & Warshaw, LLP), W. Joseph Bruckner, Heidi M. Silton, Elizabeth R. Odette (Lockridge Grindal Nauen PLLP), Daniel D. Owen, Amy D. Fitts (Polsinelli PC), Steven A. Asher, Mindee J. Reuben (Weinstein Kitchenoff & Asher LLC), Allan Steyer, Gabriel D. Zeldin (Steyer Lowenthal Boodrookas Alvaraz & Smith LLP), Kevin B. Love (Criden & Love, P.A.), Daniel E. Gustafson, Daniel C. Hedlund, and Sara J. Payne (Gustafson Gluek PLLC), for In Home Tech Solutions, Inc.

Companies: In Home Tech Solutions, Inc.; Panasonic Corp.; Sanyo Electric Co., Ltd.; AVX Corp.

News: Antitrust