Telescope Class Action Alleges Price-Fixing Scheme

Celestron Acquisition and Ningbo Sunny Electronic Co. faces a class action for allegedly conspiring together to create a telescope sale monopoly.

Plaintiff Daniel Hightower, a telescope consumer and amateur astronomy enthusiast, says that a jury has already found that Celestron and its parent company in China, Synta, conspired with their competitor Ningbo to fix prices, divide the market and illegally dominate it so that they could rip off American purchasers.

Hightower asserts that Synta and Ningbo Sunny manufacture more than 80% of the telescopes imported into the United States. He claims that, instead of competing with each other, the two companies have agreed on what prices to charge and which telescopes their companies will produce.

The plaintiff maintains that Celestron controls at least 70% of all U.S. telescope sales to consumers who are forced to pay supra competitive prices. Hightower says that as a result of this conspiracy, he and his fellow putative Class Members have overpaid for telescopes by at least $350 million.

Hightower says that there are two relevant markets in this telescope price class action lawsuit. He asserts that the first is for consumer telescope and telescope accessory manufacturing for importing into the United States. Hightower claims that the defendants own 80% of that market.

The plaintiff argues that Synta only manufactures high end products, while Ningbo manufactures only low end models. He asserts that Synta will not manufacture products offered by Ningbo Sunny and vice versa. Hightower claims that this is not an accident, as it is a result of a long-standing agreement between the two companies.

“As a result of their unlawful agreement not to compete, both Synta and Ningbo Sunny can, and do, charge supracompetitive prices, restrict supply, and engage in other unlawful, monopolistic conduct,” the telescope price class action lawsuit says.

Hightower claims that the second relevant market is part of a downstream market from the manufacturing market, which is a market for consumer telescope distribution. He argues that Synta and Ningbo Sunny sell their telescopes to distributors through distributor brands through their wholly owned subsidiaries, which then sell the telescopes through stores, dealers and the internet.

The telescope price class action lawsuit states that, working together, the two companies have prevented competitors from entering the market to ensure that they are the only meaningful sources of telescopes for customers in the United States.

In addition, the defendants consolidated their subsidiaries control of the distribution market by price-fixing and engaging in anticompetitive conduct, the Celestron telescope class action lawsuit states.

Specifically, Synta and Ningbo Sunny would offer supply to Celestron at prices far below those offered to independent distributors with far better credit terms, which would raise the telescope prices throughout the distribution market. Thus, the plaintiff has no choice but to pay the elevated prices caused by this unlawful collusion.

“Because of their respective market shares, agreements not to compete, and significant barriers to entry, Synta and Ningbo Sunny have an effective monopoly over the respective products each sells to distributors,” the telescope price class action lawsuit goes on to say.

Hightower explains that the defendants’ ability to control prices, influence output, and charge supracompetitive rates could last for years because of the barriers that exist to enter the telescope marketplace. He says that no new manufacturers of any significance have entered the market in the past 10 years.

The plaintiff, in his telescope price class action lawsuit, says that Synta and Ningbo Sunny have restricted supply and have charged monopoly prices because they have agreed to divide the supply market between themselves to eliminate any competition. Because there are very few substitutes for the defendants’ manufacturing services and products, distributors and consumers have little choice but to pay higher prices.

The Celestron telescope class action lawsuit says, “Defendants conspired with their co-conspirators to fix the prices of telescopes, to allocate the manufacturing and sales of telescopes, to unlawfully acquire assets, and to dominate and monopolize telescope supply and distribution.”

Hightower claims that the defendants’ conduct has caused injury to both the plaintiff and the relevant market. As a direct result of the defendants’ behavior, plaintiff and putative Class Members have been injured because they are paying arbitrarily inflated and supracompetitive prices for telescopes, the plaintiff states.

Prospective Class Members include: “all similarly situated consumers who purchased a telescope manufactured or sold by Defendants from Synta’s acquisition of Celestron in 2005 through such time as class notice is given.”

Have you purchased a telescope and think you paid too much? Leave a message in the comments section below.

The plaintiff is represented by J. Noah Hagey, Matthew Borden, Ronald J. Fisher, Gunnar Martz, and Athul K. Acharya of Braunhagey & Borden LLP.

The Telescope Price Class Action Lawsuit is Daniel Hightower v. Celestron Acquisition LLC, et al., Case No. 5:20-cv-03639, in the U.S. District Court for the Northern District of California.

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