Lawyers in the Consumer Fraud Section at Beasley Allen, in cooperation with other national firms, have filed an antitrust class-action suit against Panasonic, TDK Corp., and approximately 20 other capacitor manufacturers alleging the existence of illegal agreements to fix prices for aluminum, tantalum, and film capacitors. The complaint, filed in a New Jersey federal court on Aug. 1, 2014, describes actions by the Defendants dating back to 2007 and continuing until March 2014, when U.S., Japanese, and other nations’ antitrust authorities publicly revealed their investigations. EIQ Energy Inc., a San Jose, Calif.-based solar electronics manufacturer, claims that it and other direct purchasers of the Defendants’ capacitors were harmed by the Defendants’ agreements to fix prices at artificially inflated levels. In the suit, Beasley Allen attorneys are seeking treble damages on behalf of direct-purchasers.
Capacitors are ubiquitous in electronics. Their main purpose is to regulate and govern the flow of electrical currents through a device and insure there is adequate charge available to the device to perform the tasks we require. Although capacitors are critical to the functionality of electrical devices, they are mostly miniscule in size. For example, a typical smart-phone contains 300-500 capacitors while a typical computer has between 100 and 700. Their cost on an individual basis reflects that size, but because of the sheer number necessary for modern devices, the cost adds up quickly. The average price per unit over the last five years has been $0.01178, or just $11.78 per thousand units. But, when combined, capacitors were a $16 billion industry in 2013. While the increased cost of capacitors likely trickles down to affect every consumer – there are very few people today that do not own a single electronic device – that change in price to consumers is small compared to what a direct purchaser faces when purchasing in bulk.
Despite the size and low cost of capacitors, the market for capacitor manufacturing is difficult to enter. The necessary investment for manufacturing is not only very high (possibly in the millions of dollars), but the relatively low cost per capacitor means a manufacturer has to begin production with bulk purchasers already lined up – a daunting requirement for profitability considering the market control existing manufacturers maintain. Thus, there have been no new capacitor manufacturers during the class period alleged in the complaint. Normally, when goods are priced above fair-market competitive levels, new manufacturers would swarm to the market, but these inhibitions to market entry make collusion among the Defendants easy – they do not have to worry about an influx of competitors if they raise prices too much.
Lawyers at Beasley Allen are not alone in seeking to hold Panasonic, TDK Corp., and the other manufacturers legally responsible for their damaging actions. Several U.S. and foreign government antitrust agencies have recently revealed they are also investigating the illegal scheme. Global coordinated antitrust investigations are taking place in the United States, China, Korea, Japan, Taiwan, and Europe on these issues.
U.S. law allows the first company involved in criminal antitrust violations that self-reports to have full immunity from criminal prosecution and limitations on civil liability. One such manufacturer, believed to be Panasonic, came forward and revealed the plot, admitting its own participation in the price-fixing agreements. Once the investigations and the Defendants’ illegal actions became public, lawyers at Beasley Allen, along with the other national firms we are working with, moved quickly to recover damages for the injuries and damages caused to direct purchasers.
If you need additional information on this litigation, contact Dee Miles, who heads up our firm’s Consumer Fraud Section, or Rebecca Gilliland, a lawyer in the Section, at 800-898-2034 or by email at Dee.Miles@beasleyallen.com or Rebecca.Gilliland@beasleyallen.com.
Sources: http://www.law360.com/classaction/articles/563980?nl_pk=03236d8b-03b5 and the complaint.
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