Price-Fixing Scandal Rocks European Construction Giants in US Court

French building materials behemoth Saint-Gobain, along with prominent European construction chemical manufacturers Sika and Master Builders Solutions, find themselves entangled in a legal battle on U.S. soil. A lawsuit was filed on Wednesday in the federal court of Philadelphia, alleging a conspiracy to fix prices on essential ingredients used in cement, concrete, and mortar.

The legal action was initiated by M&D Peterson LLC, a general contractor supply company based in Jamestown, New York. The prospective class-action lawsuit accuses the companies of artificially inflating prices, thus potentially affecting a broad range of stakeholders in the construction industry.

The lawsuit emerges on the heels of a joint effort by the European Commission, along with British and Turkish competition authorities, who in October conducted surprise inspections within the construction chemicals sector. The investigation specifically targeted Sika, Saint-Gobain, and Master Builders Solutions, all of which are now defendants in the U.S. case.

Related: NY Bus Company Accuses Rivals Of Price-Fixing Scheme

A spokesperson for Saint-Gobain pointed to a prepared statement asserting the company’s cooperation and stating, “At this stage, we see no reason to believe there will be an impact” on the organization. However, representatives for Sika and Master Builders Solutions have yet to respond to requests for comments on the allegations.

Sika, in a previous statement, maintained that the company was unaware of any culpability but expressed cooperation with the ongoing authorities’ investigations. The legal proceedings in the U.S. are likely to amplify the scrutiny faced by these European companies.

Notably, investigations initiated by entities such as the European Commission often pave the way for private civil litigation in the United States. The law firm Hausfeld, representing the plaintiffs in this case, refrained from immediate comments on Thursday.

Source: Reuters