MDI and TDI Makers Price-Fixing Conspiracy Antitrust Class Action

The complaint for this class action is almost word-for-word identical to one filed at the end of June, from a different plaintiff, alleging that an anticompetitive conspiracy has existed in the US since at least January 1, 2016 to raise the price of MDIs and TDIs, which are precursor ingredients for foam and related products.

The class for this action is all entities in the US, its territories, and the District of Columbia who bought MDI or TDI products directly from any of the defendants in this case (or from their controlled subsidiaries, agents, affiliates, or joint ventures), between January 1, 2016 and the present.

The defendants in this case include Bayer A.G.; Bayer Corporation; Covestro LLC (formerly known as Bayer MaterialScience LLC); BASF SE; BASF Corporation; Dow Chemical Company; Huntsman International LLC; Huntsman Corporation; Wanhua Chemical Group Co., Ltd.; Wanhua Chemical America Co., Ltd.; Mitsui Chemicals, Inc.; Mitsui Chemicals America, Inc.; MCNS (a.k.a. Mitsui Chemicals & SKC Polyurethanes, Inc.); and MCNS Polyurethanes USA Inc.

The above companies make and sell methylene diphenyl diisocyanate (MDI) and toluene diisocyanate (TDI).

These products are precursor ingredients for polyurethane foams and thermoplastic polyurethanes, which in turn are used in making products such as mattresses, upholstered furniture, and car seats. They are also used for rigid polyurethane foam, which is used to insulate buildings and refrigeration appliances. Thermoplastic polyurethanes are used in clothing, mobile devices, and sports equipment.

Originally, the complaint claims, the prices of MDIs and TDIs were low and relatively stable. Beginning in 2014, however, the complaint says that a market oversupply led to a price decline. Lower prices for raw materials for MDIs and TDIs, such as benzene and oil, continued the decline in 2015.

But in 2016, the complaint claims, the defendants set out to reduce the supply by permanently or temporarily suspending operations at some plants and by reducing the output of other plants. During the years 2012-2015, only eight plant-related issues were reported, but the complaint claims that in 2016 alone, at least nine closures or production limitations were reported by the defendants, and as well as fifteen in 2017.

The complaint claims that this led to a global shortage of MDIs and TDIs, which led to price hikes. Prices have now reached what the complaint calls “historically unprecedented levels and have stuck there” for more than two and a half years. The hikes were not caused by any increase in the price of raw materials.

In February 2018, the Antitrust Division of the US Department of Justice had subpoenas issued to certain makers of MDI products, in connection with a criminal investigation of price-fixing. Among the defendants in this case, both BASF and Covestro admitted to receiving subpoenas and the complaint claims that Dow, Huntsman, Bayer, Wanhua, and Mitsui most likely received them (or will receive them) as well.

The complaint claims that price increases in the industry “have occurred in a coordinated and lockstep manner” and that the increases have been drastic. This makes no sense, the complaint says, considering both the excess capacity and the lower costs of raw materials.

The complaint claims that the companies colluded in violation of the Sherman Antitrust Act.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

MDI and TDI Makers Price-Fixing Conspiracy Antitrust Complaint

August 29, 2018

The complaint for this class action is almost word-for-word identical to one filed at the end of June, from a different plaintiff, alleging that an anticompetitive conspiracy has existed in the US since at least January 1, 2016 to raise the price of MDIs and TDIs, which are precursor ingredients for foam and related products.

tdi_mdi_antitrust_complaint.pdf

Case Event History

MDI and TDI Makers Price-Fixing Conspiracy Antitrust Complaint

August 29, 2018

The complaint for this class action is almost word-for-word identical to one filed at the end of June, from a different plaintiff, alleging that an anticompetitive conspiracy has existed in the US since at least January 1, 2016 to raise the price of MDIs and TDIs, which are precursor ingredients for foam and related products.

tdi_mdi_antitrust_complaint.pdf
Tags: Antitrust, Collusion & Price Fixing