General Electric Servicing of Gas Anesthesia Machines Antitrust Class Action

This complaint alleges General Electric and subsidiaries have conspired to block competition for the servicing of GE’s gas anesthesia machines. It brings suit under the Sherman antitrust laws—not on behalf of the those so blocked, but on behalf of those who must pay higher prices to have their machines serviced.

The class for this action is all persons and entities who bought servicing of GE gas anesthesia machine in the US directly from GE, between April 2011 and the present.

The complaint says that independent service organizations (ISOs) should be able to compete in the market to service the machines, but that GE has blocked their competition with its own servicing people in two ways, by limiting reliable access to two areas where GE hold a kind of monopoly. 

First, it controls access to “parts, tools, test equipment, service manuals, and specifications required for servicing the machines (the parts market). 

Second, it controls access to the training necessary for the servicing of the machines (the training market).

GE used to sell parts and training courses to ISOs. But in April 2011, it named Alpha Source, Inc. as its exclusive distributor of parts. Alpha Source did not keep a full inventory of parts needed for servicing and charged high prices to ISOs, the complaint says. In October 2014, it refused ISOs access to training courses at all but one of its facilities and often rejected ISOs’ applications at that one. If it does allow an ISO to enroll, it requires that the ISO disclose “competitively sensitive” information.

GE’s limiting of access in these two areas has allowed it to charge high prices for its own services. The complaint claims that GE’s internal documents state that the purpose of the changes was to “slow down,” “add cost” for, and “phase out” its competitors in servicing.

The complaint refers to a previous, similar antitrust action against GE’s denying access to these markets. A retrial has been ordered in that case. The complaint says that after judgment is entered in the retrial, GE will not be able to contest the same issues in other cases. Therefore, it says, this case must only show that the hospital “has been materially injured by GE’s exclusionary conduct in its business or property by paying supracompetitive, monopoly prices for servicing of GE gas anesthesia machines.”

The complaint proceeds to do this. For example, it alleges that Alpha Source charges ISOs 18 to 20 percent more than GE’s published price list for parts. However, it alleges, GE will not fill ISOs’ orders. Also, if a part is not in stock and needed immediately, “ISOs are forced to pay an enhanced price along with another flat fee of $1,000 shipping per line item, regardless of the actual shipping cost.”

The complaint says that GE is deliberately earning less in its sales of parts and training, which makes no sense unless it is getting a benefit in another area—that is, its monopolization of the servicing market.

Article Type: Lawsuit
Topic: Antitrust
No case events.
Tags: Antitrust, Requiring Consumer to Pay Higher Prices