Antitrust Claims Against Telescope Manufacturer Ningbo Sunny Dismissed And Shot Into Space

On September 28, 2017, Judge Edward Davila dismissed an antitrust complaint filed by Optronic Technologies, Inc. (dba Orion) against Ningbo Sunny Electronic Co., Ltd., Sunny Optics, Inc. and Meade Instruments Corp. The case is Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd., Case No. 5:16-cv-06370-EJD (N.D. Cal.). Defendants are represented by Leo Caseria and Mike Scarborough of Sheppard, Mullin, Richter & Hampton LLP.

Orion alleged that Defendants conspired with a competitor to allocate telescope markets and fix telescope prices in violation of Sherman Act Section 1, monopolized or attempted to monopolize the consumer telescope market in violation of Sherman Act Section 2, and violated Clayton Act Section 7 when Ningbo acquired Meade in 2013, a transaction that Orion alleges tended to create a monopoly.

The stars aligned for Defendants and Orion's case cratered at the pleading stage when Judge Davila granted Defendants' motion to dismiss. Judge Davila agreed with Defendants that Orion's Section 1 conspiracy allegations were contradicted by Orion's Section 2 monopolization allegations. As an alleged monopolist, Ningbo would already have the power to raise prices or exclude Orion on its own, so it would make no sense for Ningbo to conspire with another company to accomplish something it could do on its own.

As for Orion's Section 2 monopolization allegations, Judge Davila agreed with Defendants that Orion had not sufficiently alleged any barriers to entry or expansion. Orion alleged that Ningbo had a 75% market share, but without barriers to entry or expansion, other competitors or potential competitors could compete and take that market share away.

With respect to Orion's Section 7 claims, Judge Davila agreed with Defendants that Orion had not alleged any antitrust injury. When Ningbo acquired Meade, it allegedly prevented Orion from acquiring Meade. But that would have been the case regardless of who acquired Meade. As Judge Davila explained: "Plaintiff describes only conduct that harms it as a competitor, but not harm to competition itself. . . . That sort of harm is not protected by antitrust laws."

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