A class action lawsuit alleges that there was a widespread price-fixing scheme by the largest manufacturers, marketers and distributors of telescopes that caused consumers in Canada to pay a supracompetitive rate for the products.
Consumers Allegedly Paid Inflated Prices for Telescopes
Plaintiff I. Baban says he purchased a Celestron 21024 FirstScope telescope on Amazon as a Christmas gift for his son in 2016, and purchased the same telescope model for a friend’s birthday in December 2016. He reportedly paid $68.97 each for the telescopes.
According to the telescope price-fixing class action lawsuit, Baban paid an artificially inflated price for the telescopes due to anticompetitive conduct of the defendants.
Baban filed the telescope price-fixing class action lawsuit on behalf of himself and a proposed Class of all Quebec residents who purchased a telescope that was manufactured or sold by the defendants or their alleged co-conspirators since Jan. 1, 2005. Baban seeks refunds on behalf of himself and the proposed Class in the amount of the difference between the artificially-inflated price they paid for their telescopes and what they would have paid in a competitive market.
The defendants named in the telescope price-fixing class action lawsuit include: Synta Technology Corporation of Taiwan, Synta Canada International Enterprises Ltd., Suzhou Synta Optical Technology Co. Ltd., Nanton Schmidt Opto-Electrical Technology Co. Ltd., SW Technology Corporation, Sky-Watcher USA, Pacific Telescope Corp., Celestron Acquisition LLC, Celestron International, Olivon Manufacturing Co. Ltd., Olivon International Enterprise Inc., Olivon USA LLC and Ningbo Sunny Electronic Co. Ltd.
Class Action Lawsuit: Companies Colluded to Fix Telescope Prices
According to the telescope price-fixing class action lawsuit, Synta and Sunny are essentially the only two manufacturers of telescopes in Canada, and their telescopes are sold under the following brand names: Celestron, Meade, Sky-Watcher, Olivon and Synta.
The telescope price-fixing class action lawsuit Canada says that Sunny and Synta possess about 80% of the global telescope manufacturing market. Both companies are allegedly capable of manufacturing all types of consumer telescopes, but they allegedly “have an illegal agreement or understanding that Synta only manufactures higher-end products while Sunny manufactures lower-end products.”
This allegedly unlawful agreement has allowed the companies to charge supracompetitive prices, restrict the supply, and engage in other anticompetitive conduct that results in consumers paying inflated prices for their telescopes.
Sunny and Synta reportedly also possess more than 80% of the distribution market for telescopes in North America. According to the telescope price-fixing class action lawsuit, the “vast majority” of consumer telescopes sold in North America are sold by Celestron, which was acquired by Synta in 2005, and Meade, which Sunny reportedly acquired with Synta’s help.
Baban alleges that the defendants have engaged in a number of anticompetitive acts, including: jointly setting the price at which consumers could purchase telescopes, jointly setting trade and credit terms for consumers’ purchase of telescopes, jointly refusing to manufacture specific telescope products, jointly agreeing to divide the market for production and distribution of telescopes and telescope products, and jointly colluding to ensure the defendants’ purchase of Meade.
Due to the defendants’ anticompetitive conduct, there has allegedly been a reduction in the number of manufacturers of consumer telescopes, an elimination of new entrants into the market, forcing existing independent manufacturers and distributors out of the market, a restraint on price competition, and artificially inflated prices for consumer telescopes.
History of Antitrust Concerns in Consumer Telescope Market
The telescope price-fixing class action lawsuit notes that there have been concerns from antitrust regulators regarding the consumer telescope market for decades.
“Approximately 30 years ago, the [U.S. Federal Trade Commission] investigated a proposed joint venture between Meade and Celestron that it charged would have created a virtual monopoly in the manufacture and sale of certain telescopes,” the telescope price-fixing class action lawsuit states.
In 1991, the FTC reportedly gave final approval to a settlement that required the former parents of Meade and Celstron to obtain FTC approval prior to acquiring any company that manufactures or sells certain telescopes in the United States.
In 2002, Meade reportedly attempted to acquire Celestron but abandoned the effort after a temporary restraining order and preliminary injunction was ordered in federal court.
“According to the FTC complaint, Meade’s acquisition of Celestron assets would adversely impact the performance telescope market by eliminating substantial actual competition between the two companies and by creating a monopoly in the telescope market,” the telescope price-fixing class action lawsuit says.
The telescope industry is not the only industry to face allegations of anticompetitive conduct. A price-fixing class action lawsuit was recently filed against door manufacturing companies for allegedly conspiring to increase the prices of interior molded doors.
What do you think about this telescope price-fixing class action lawsuit? Do you own a telescope? Tell us in the comment section below!
Baban is represented by Andrea Grass of Consumer Law Group Inc.
The Telescope Price-Fixing Class Action Lawsuit is I. Baban v. Synta Technology Corporation of Taiwan, et al., Case No. 500-06-001095-203, in the Superior Court of Québec, District of Montreal, Canada.
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