General Electric sues Whirlpool over price of part

Price-fixing conspiracy alleged

Associated PressFebruary 21, 2013 

LOUISVILLE — A refrigerator component the size of a toaster has sparked a legal fight in Kentucky pitting two appliance giants.

General Electric has filed an anti-trust lawsuit claiming it overpaid for the component because of an alleged price-fixing conspiracy involving a couple of Whirlpool subsidiaries and two European suppliers also named as defendants.

The suit is over a compressor that helps create cold air to keep refrigerated foods fresh or frozen. GE claims the conspiracy began as early as 1996 to illegally inflate the price of the key refrigerator part.

As one of the largest buyers of the compressors, GE says it was "a target and a victim" of the conspiracy, hurting its refrigerator business.

The company, based in Fairfield, Conn., is seeking unspecified compensatory and punitive damages along with a monetary award three times the amount of its damages. It also seeks an injunction against the defendants.

The 79-page lawsuit was filed late last week in federal court in Louisville, home of GE's appliance business. Defendants include Whirlpool and its subsidiaries that produce and sell refrigerator compressors.

Benton Harbor, Mich.-based Whirlpool said it was reviewing the lawsuit and would respond in "due course through the judicial process." The company's other brands include Maytag and KitchenAid.

A spokeswoman for Whirlpool subsidiary Embraco North America Inc., another defendant, also said the matter was under review.

Other defendants include Whirlpool S.A., a wholly owned subsidiary of Whirlpool Corp.; Danfoss A/S, identified as a privately held Danish company that supplies refrigerator products, including the compressors; and Household Compressors Holding SpA, listed as an Italian company that sold the compressors in the U.S. during the alleged conspiracy period.

GE claims the defendants and two alleged co-conspirators commanded about 85 percent of the U.S. refrigerator compressor market in 2008. The suit says the conspirators agreed on a plan to allocate GE's business among themselves to avoid competing on price, quality, efficiency and technology.

In late 2004, one co-conspirator notified GE that it planned to increase prices by 11 percent, the suit said. About the same time, Embraco announced a 12 percent price increase, it said.

The suit claims the alleged conspirators met to "discuss and agree upon future price stabilization and price increases ... ."

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