Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Construction project data provider allegedly used predatory pricing to monopolize market, (Nov 2, 2015)

By Linda O’Brien, J.D., LL.M.

A construction project information database service provider has attempted to monopolize the market for providing nationwide commercial construction project information to contractors, builders, and suppliers by acquiring rival providers and engaging in predatory pricing, according to a complaint filed in the federal district court in Cincinnati, Ohio (Dodge Data & Analytics, LLC v. iSqFt, Inc., October 28, 2015).

Dodge Data & Analytics, LLC is a provider of commercial project information (CPI), building product information, construction plans and specifications, industry news, market research, and industry trends and forecasts for building products manufacturers. Dodge uses a nationwide network of individuals who obtain construction plans and specifications from architects, project owners, and other construction industry professionals.

iSqFt, Inc. provides software products to general contractors, subcontractors, manufacturers, and suppliers in the U.S. commercial construction industry that are used primarily during the design, pre-construction, and procurement stages of construction that help users identify project leads and product sales opportunities, network with other construction professionals, manage the bid solicitations, and view drawings and specifications.

The complaint states that in 2014 iSqFt expanded from providing software to a full service nationwide provider of CPI. To monopolize the market for providing nationwide CPI, iSqFt allegedly acquired every competition in the market other than Dodge, including Construction Data Corporation (CDC), Construction Market Data Group (CMD), and BidClerk, Inc. As a result of the acquisitions, there are only two competitors for nationwide CPI customers, Dodge claims. iSqFt also unsuccessfully attempted to acquire Dodge, which would have created a 100 percent monopoly in the nationwide CPI market.

Similar to Dodge, CMD has an extensive network of employees and contractors who obtain plans and specifications from architects, project owners, and others in the industry and provides them to customers through a web-based subscription service. In 2009, CMD brought suit against Dodge, alleging that Dodge improperly assessed CMD databases by posing as CMD customers. During the course of the litigation, Dodge discovered that CMD had hired former Dodge employees who had taken highly confidential information from Dodge and turned it over to CMD that used the information to compete against Dodge in the CPI market, the complaint alleges.

According to the complaint, there are no available substitute products for nationwide CPI which provides customers with detailed, comprehensive, and up-to-date information on upcoming and planned construction projects. There are no products with a high elasticity of demand such as nationwide CPI since customers cannot cobble together the same quality and quantity of information available in nationwide CPI products. Also, Dodge asserts that there are significant barriers to entry into the market since, to compete effectively, a firm must have access to nationwide information that can only be done by developing a network over the course of many years.

The complaint also alleges that in 2014, CMD began a scheme to disrupt Dodge’s business. Using the confidential information obtained through former Dodge employees, CMD engaged in a concentrated sales blitz targeting Dodge customers and offered predatory prices to drive Dodge from the market. As a result of these anticompetitive acts, Dodge has purportedly lost customers with millions of dollars in annual sales volume.

In addition to its production and sale of CPI, Dodge publishes Sweets Catalog, a product catalog for the construction industry. Since 1940, Doge has used a distinctive trademark, consisting of a white “S” inside a solid circle. Over more than fifty years of widespread use and enormous goodwill that the catalog has developed, consumers of architectural product catalogs associate the stylized “S” logo with Dodge and its Sweets publication. However, recently CDC has begun to use a mark that is strikingly similar to the Sweets mark for the purpose of selling advertising in a product that competes direct with Dodge’s Sweet’s publication. The CDC mark is likely to cause and has actually caused customers to believe that CDC is associated with Sweets or that its products are endorsed by Sweets, Dodge claims. CDC is unfairly trading upon and appropriating the reputation and goodwill of Sweets for its own commercial gain, the complaint charges.

The plaintiff asserts claims for trespass to chattels, tortious interference with prospective business relationships, trademark infringement, unfair competition, conspiracy to monopolize, and attempted monopolization in violation of Sections 1 and 2 of the Sherman Act and Ohio Deceptive Trade Practices Act. The action seeks declaratory and injunctive relief, damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 1:15-cv-00698-TSB.

Attorneys: Russell S. Sayre, Mark T. Hayden, Aaron M. Herzig (Taft Stettinius & Hollister LLP) and Stuart I. Friedman, Paul S. Grossman, Jonathan Daugherty (Friedman & Wittenstein) for Dodge Data & Analytics, LLC.

Companies: Dodge Data & Analytics, LLC; iSqFt, Inc.; Construction Market Data Group, LLC; Construction Data Corporation, LLC; BidClerk, Inc.

News: Antitrust OhioNews