Heavy equipment manufacturers Caterpillar, Komatsu and Volvo have been hit with an anti-trust lawsuit in the US for anticompetitive conspiracy and collusion.
International Construction Products (ICP) filed the suit in late January, alleging the three global major OEM’s conspired to exclude the new player from the market and attack their main distribution channel of online sales.
The suit claims that the defendant companies have charged prices above competitive levels for years because the oligarchal market was protected by high barriers to entry.
ICP stated Cat, Komatsu and Volvo successfully applied economic pressure on IronPlanet, an online machinery market, to discontinue sales of ICP products and breach its contract with the new manufacturer.
The contract between IronPlanet and ICP was key to key to their strategy to sell discounted Chinese equipment direct to the customer at prices up to 40 per cent lower than prices commanded by the other companies.
After the launch of ICP in 2014, Cat Auction Services merged with IronPlanet, and it was alleged this merger was designed to completely shut off the means of entry to market.
Legal representation for ICP suggests the defendants threatened to boycott IronPlanet if they ever dealt with ICP or other new entrants to the market.
ICP allowed customers to use local dealers of their choice to perform warranty work.
The new company has claimed compensation and punitive damages, as well as the winding back of the merger between Cat Auction Services and IronPlanet, and dissolution of exclusivity agreements between the defendants and their dealers.