GE claims it overpaid for part due to conspiracy

Published on NewsOK Modified: February 20, 2013 at 2:18 pm •  Published: February 20, 2013
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LOUISVILLE, Ky. (AP) — A refrigerator component the size of a toaster has sparked a legal fight in Kentucky pitting two appliance giants.

General Electric Co. filed an anti-trust lawsuit claiming it overpaid for the component due to an alleged price-fixing conspiracy involving a couple of Whirlpool Corp. 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.

"As a result of the cartel, plaintiff has paid supra-competitive prices for compressors and has been deprived of innovation that would have resulted in increased efficiency, as well as increased sales and profits, in its sales of refrigerators," the suit said.

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.

"We are studying the lawsuit and have no comment at this time, except to say that Embraco does not believe that it caused any harm to GE," the spokeswoman, Rosangela Santo, said in an email.

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