NEWARK (CN) - Hitachi, Panasonic, Sanyo and a host of other electronics manufacturers conspired to fix prices of capacitors, a Silicon Valley company claims in a federal antitrust class action.
eIQ Energy, of San Jose, named 27 companies as defendants, including NEC Tokin Corp., AVX Corp., Elna Co., Rubycon and TDK Corp.
Capacitors are "passive electronic components that are used to store electricity and release it when required" according to the complaint. "Capacitors are incorporated into almost every electronic device, including audio/video equipment, telecommunication equipment, computers and automobiles."
eIQ, a small company that makes clean energy electronic products, claims that the capacitor market is "susceptible to collusion" because the market is concentrated and "the five largest defendants collectively make up more than 76 percent of the global market for tantalum capacitors."
It adds that "pricing for capacitors is highly inelastic in large part because there are no adequate substitutes."
After the recession that began in 2008, eIQ says, "the price gap between Japanese-sourced aluminum capacitors and Chinese-sourced capacitors significantly widened." Because of this, eIQ claims, "the defendants were able to impose supra-competitive prices for their film capacitor products."
During this time, the defendants "made public statements attributing price increases to market forces, including increased raw material costs and shortages caused by natural disasters, rather than attributing price increases to the effective implementation of their anticompetitive agreement," eIQ says.
But eIQ says that several governments have noticed the trend, and that as early as 2008, "the Antitrust Division of the U.S. Department of Justice confirmed that it is conducting an investigation into price fixing of capacitors."
eIQ claims that other investigations are under way, including ones launched by the Japanese, Korean and Taiwanese governments, in addition to the European Union.
eIQ claims that neither it nor other members of the proposed class "did not discover, and could not have discovered through the exercise of reasonable diligence, the existence of the alleged conspiracy until approximately March 2014, when governmental investigations about the conspiracy were publicly revealed in the press."
eIQ accuses the defendants of "participating in meetings, conversations, and communications to discuss the price and pricing terms for the sale of capacitor products in the United States."
eIQ claims that violates Section I of the Sherman Act.
In 2013, "global sales of capacitors exceeded 1.3 trillion units and global revenue for capacitors exceeded $16 billion," the complaint states. "By 2019, it is estimated that over 2 trillion capacitors will be sold globally for over $22 billion."
eIQ seeks class certification, to cover "all persons that purchased capacitor products in the United States directly from the defendants ... from January 2008 until the present." It estimates "that the class numbers in the hundreds, if not thousands."
It seeks treble damages and costs.
Its lead counsel is Dennis Drasco, with Lum, Drasco & Positan, of Roseland, N.J.
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