PoolCorp Hit with Antitrust Lawsuits in Wake of FTC Settlement

PoolCorp, a Louisiana Company said to be the largest wholesale distributor of swimming pool supplies in the world, has been named in at least eight antitrust lawsuits that allege company’s tactics drove up prices, stifled competition and limited consumers’ choices. The lawsuits come on the heels of PoolCorp’s settlement with the U.S. Federal Trade Commission (FTC) over similar allegations.

According to a report in the LA Times, the PoolCorp antitrust lawsuits have been filed in California, Louisiana and Florida, and plaintiffs’ lawyers have petitioned the Judicial Panel on Multidistrict Litigation (JPML) to consolidate complaints before a single judge in Orange County, New Orleans or Miami. The companies that have filed the lawsuits allege they purchased pool products from PoolCorp at artificially inflated prices, and accuse the company of using “unfair methods of competition” and “impeding market entry by potential rivals,” the LA Times said.

In November, the FTC settled similar allegation with PoolCorp. In a Consent Agreement with the agency, PoolCorp agreed not to retaliate against any manufacturer for selling products to other distributors and requires it to create an “antitrust compliance program.”

“Specifically, the FTC contends that PoolCorp threatened manufacturers of pool products that PoolCorp would not sell their products at any of its 200 distribution centers if manufacturers also sold their products to new distributor rivals,” an FTC statement announcing the settlement said. “According to the complaint, PoolCorp’s threats were significant because the loss of PoolCorp sales could be catastrophic to even the largest pool products manufacturer. As a result, the agency alleged, these threats were effective, and manufacturers representing more than 70 percent of all pool products sales refused to sell to new distributors. In order for a distributor to succeed, the FTC alleged, it must be able to buy pool products directly from manufacturers because there are no cost-effective alternatives.”

According to the FTC, these tactics prevented new distributors from entering the market, raised the costs of new distributors, and likely resulted in higher prices for customers.

The settlement, which got final approval this week, did not include any financial penalties. PoolCorp has not admitted any wrongdoing.

“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,” the three FTC commissioners who approved the deal wrote, according to the LA Times.

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