Schneider Wallace Files Antitrust Case Against Walmart and Energizer for Battery Price Manipulation
On April 28th, 2023, Schneider Wallace Cottrell Konecky LLP filed lawsuits in the Northern District of California against Energizer Holdings Inc. and Wal-Mart Inc. The complaints allege that Walmart and Energizer violated federal and California antitrust and consumer protection laws by entering into anticompetitive agreements to inflate wholesale and retail prices for disposable batteries.
One plaintiff is a direct purchaser from Energizer, who allege they learned in 2021 about the details of the scheme between Energizer and Walmart to keep wholesale prices inflated. A second complaint plaintiff is a purchaser who suffered alleged higher prices when purchasing disposable battery products.
Federal Antitrust Law
The Sherman Antitrust Act contains multiple sections detailing limits of corporate behavior regarding anticompetitive actions.
The lawsuits allege violations of both the first and third acts:
Section 1: The first section of the Sherman Antitrust Act prohibits monopolization attempts, monopolies, or conspiracies to monopolize a market. It covers multiple types of actions including exclusive dealing contracts and predatory pricing.
Section 3: Extends the reach of the Act.
California Antitrust Law
California has its own antitrust laws, including the Cartwright Act. It is largely similar to the federal Sherman Antitrust Act, and was originally passed a few decades after the federal Sherman Act in 1907.
The Cartwright Act contains multiple sections, including:
Section 16720: Defines a “trust” as any group (two or more) that engage in the following behavior:
- Create or carry out restrictions on trade.
- Limit production of or increase the price of merchandise.
- Prevent competition in purchase, sale, transport, or manufacturing of a product.
- Price fixing.
- Entering into contracts, agreements or obligations enforcing or allowing the actions listed above.
Section 16721: Defines monopoly.
Section 16722: Prohibits monopolies and trusts.
Section 16726: Creates a felony for attempts or conspiracy to form a monopoly or trust.
Section 16750: Allows for recovery of damages through lawsuits.
Section 16760: Prohibits mergers that would reduce competition.
Alleged Anticompetitive Scheme to Inflate Battery Prices
As alleged in the complaint, the scheme by Walmart and Energizer consisted of the following alleged actions:
- Energizer agreed to inflate wholesale pricing above competitive levels to direct customers other than Walmart.
- Energized agreed to have their direct purchasers charge no less than Walmart pricing, even if Walmart charged a large margin above wholesale pricing.
- Energizer internally policed direct purchasers retail pricing to ensure Walmart pricing was not undercut. If resellers were not compliant with the scheme, Energizer raised wholesale prices on the customer offering low prices until they could no longer do so.
- The alleged scheme was overall facilitated by the market share of Energizer, over 50%, combined with a duopoly in the market with only one main competitor (Duracell).
- Walmart maintained high pricing for Duracell to remove competition for pricing from the one main competitor.
- Price rose by 30% while Energizer products decreased.
A full read of the allegations in the complaint can be found here. Todd Schneider, Jason Kim, Matt Weiler, and Mahzad Hite are the named attorneys from Schneider Wallace representing plaintiffs.
Antitrust Class Action
The plaintiffs seek to proceed as representatives of the following classes:
California: All persons and entities that purchased Energizer Battery Products directly from Energizer in California from January 1, 2018, until the anticompetitive effects of Defendants’ challenged conduct cease.
National: All persons and entities that purchased Energizer Battery Products directly from Energizer in the United States from January 1, 2018 until the anticompetitive effects of Defendants’ challenged conduct cease.
Antitrust Law Firm
If you believe you have been affected by an anticompetitive action, schedule an appointment with our legal team to learn more about filing an antitrust class action lawsuit. We represent businesses and consumers harmed by anticompetitive behavior.
Our national trial firm maintains offices in Northern and Southern California, Texas, North Carolina and Puerto Rico, and represent clients in many nationally and in many other states. We represent both businesses and consumers who have suffered damages due to anticompetitive conduct.