Prices Rigged for Electronic Resistors, Class Says

SAN FRANCISCO (CN) - Panasonic and others conspired to fix the prices of linear resistors, a component of "almost all electronic products" today, a class claims in Federal Court.

Used to regulate how much electrical current passes from one circuit to another, linear resistors are used in everything from cellphones to cars, according to the Aug. 18 complaint. The case is the Top Download today for Courthouse News.

Microsystems Development Technologies, the lead plaintiff behind the action, buys resistors from distributors and uses them as components in other products.

A few companies control the "lion's share" of the resistors market, and a price-fixing scheme between them has led to artificially high, anticompetitive prices, according to the complaint.

Price-fixing conspiracies have dogged Panasonic over the years, Microsystems says, noting that the company already pleaded guilty to a scheme to control the prices of refrigerant compressors between 2004 and 2007.

In 2013, Panasonic paid a $45.8 million criminal file for its role in a scheme to control the prices of automotive technologies, including steering angle sensors and high-intensity discharge ballasts, between 2003 and 2010.

Panasonic's subsidiary, SANYO Electric Co. Ltd., also admitted to fixing the prices of cylindrical lithium-ion battery cells for notebook computers in 2007 and 2008, according to a 2013 DOJ report.

"Panasonic is sort of a repeat price-fixing offender," Adam Zapala, an attorney for Micosystems with Cotchett, Pitre & McCarthy, said in an interview. "They've been named and shamed in many different complaints - civil investigations and criminal investigations. This is the latest of many."

The complaint comes roughly two months since the U.S. Department of Justice "initiated an investigation of price fixing in the resistors industry."

Microsystems calls the DOJ's resistors probe an "offshoot" of a larger investigation into an alleged scheme to fix the prices of electronic capacitors.

Panasonic, "one of the world's leading manufacturers of both resistors and capacitors," is one of eight companies to admit that the DOJ contacted it, Microsystems says (emphasis in original).

The Korean Fair Trade Commission and Japanese Fair Trade Commission have both launched probes into the matter as well, according to the lawsuit.

In addition to Japan-based Panasonic Corp., Microsystems names that company's U.S. subsidiary as a defendant, plus five other companies and their affiliates.

Three of the other defendants are also based in Japan. They are KOA Corp., Murata Manufacturing Co. Ltd., ROHM Co. Ltd.

The other two defendants Vishay Intertechnology Inc. and Yageo Corp. are based in Pennsylvania and Taiwan, respectively.

Though there is a four-year statute of limitations for bringing antitrust claims, Microsystems says the window in this case was tolled by the defendants' concealment of their misdeeds.

"Defendants used mechanisms designed to conceal their collusion, such as covert meetings, use of code words or terms to refer to competitors and/or customers, use of pretexts to mask the true purpose of collusive communications, use of non-company phones, and instructions to destroy emails evidencing collusive activities," the 41-page complaint states.

Membership in trade groups like the Electronic Components Industry Association helped facilitate the conspiracy by allowing the companies to exchange information and punish one anther for not complying with the "illegally agreed upon price framework," the lawsuit claims.

The U.S. market for resistors is estimated at $959 million and accounts for 23 percent of the global market, according to a U.S. International Trade Commission report cited in the complaint.

In addition to an injunction, Microsystems seeks restitution and disgorgement.

Because resistors are so ubiquitous, attorney Zapala said expects the amount of damages to reach the "multiple millions."

Transactional data the plaintiffs plan to obtain in discovery and expert analysis are needed to calculate the final figure, he said.

Panasonic of America did not immediately return a request for comment.

Follow @NicholasIovino

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit