A November settlement between PoolCorp and the Federal Trade Commission over allegations that PoolCorp pressured manufacturers through “monopoly power” to not sell competitor products to distributors, has sparked antitrust lawsuits against the company and two of its subsidiaries, the LA Times reports.
So far, eight lawsuits have been filed against PoolCorp by plaintiffs who allege they purchased products at inflated prices. Attorneys for the plaintiffs have requested the U.S. Judicial Panel on Multidistrict Litigation to consolidate the lawsuits before one judge in Orange County, California or New Orleans, Louisiana, or Miami, Florida.
The FTC said three companies manufacture nearly all parts needed for pools and account for more than 50 percent of supply sales at the wholesale level. These three companies are Pentair Water Pool and Spa Inc., Haywood Pool Products Inc., and Zodiac Pool Systems Inc. According to the lawsuits, “The manufacturers, including the three ‘must-have’ manufacturers, refused to sell pool products to the new entrant and canceled any preexisting orders.” The suit continues that, “Without direct access to the manufacturers’ pool products, the new entrant’s business ultimately failed in 2005.”
The FTC commissioners said the investigation into PoolCorp showed that “Although these manufacturers preferred to have a broad and diverse distribution network, they declined to add distributors because they feared retribution from Pool Corp. These decisions were not made for independent business reasons.”