PRESS RELEASE—FOR IMMEDIATE RELEASE
UNITED STATES INTERNATIONAL TRADE COMMISSION INSTITUTES ANTITRUST INVESTIGATION AGAINST ROCKWELL AUTOMATION
Willingboro, NJ - On March 30, 2018,
The U.S. International Trade Commission (“ITC”) instituted an antitrust investigation against Rockwell Automation (“Rockwell”) following the filing of a Complaint by Radwell International, Inc. (“Radwell”), a leading seller of industrial electrical and electronic control devices. The Commission denied Rockwell’s request for adjudication by way of the Early Disposition Pilot Program. The Commission will investigate whether Rockwell’s sale of imported programmable logic controllers (“PLCs”) in the United States has caused or threatens to cause substantial injury to Radwell due to Rockwell’s engagement in an unlawful hub-and-spoke conspiracy, the overarching purpose and effect of which is to illegally prevent resellers from purchasing and reselling PLCs and to illegally fix the resale prices of PLCs in the United States. Radwell’s ITC Complaint brings to light Rockwell’s restrictive distribution scheme, which harms competitors and consumers and illegally maintains artificially high prices for PLCs in the United States. It is noteworthy that this is the first antitrust investigation to be instituted by the ITC following its March 18, 2018 decision in Certain Carbon and Alloy Steel Products. In that case, the ITC adopted a new pleading standard for antitrust complaints filed under Section 337 of the Tariff Act of 1930.
In 2002, Brian Radwell faced an industrial market so fragmented that factories needed to hire outsourcing specialists to consolidate. Radwell harnessed the internet’s potential to provide customers with the most comprehensive product and service offerings in the industry. The market—from small machine shops to Fortune 500 companies—responded enthusiastically, fueling Radwell’s growth. Customers clearly appreciated the convenience of purchasing quality products from one source.
In an apparent attempt to thwart Radwell’s price competition, Rockwell filed numerous state and federal trademark claims against Radwell in New Jersey district court. Rockwell followed those claims with similar allegations before the ITC in September 2017. Rockwell’s tactics have all the hallmarks of an unlawful antitrust scheme: boycotting competitors, resale price-fixing, creating high barriers to entry, pursuing baseless litigation, and intimidation.
Rockwell has engaged in a clear pattern of unfair competition in an effort to maintain its monopoly in the United States. Rockwell has interfered with Radwell’s sales, used Radwell’s customers to gain access to Radwell’s selling patterns, and conspired with Rockwell’s Authorized Distributors to exclude Radwell and other resellers from the PLC market. Such behavior strikes at the heart of competition that is central to the American economy. The American consumer benefits from healthy competition and the innovation it spurs.
Radwell has shown what a strong secondary market can provide—quality products at competitive prices. By filing an antitrust complaint under Section 337 of the Tariff Act, Radwell calls upon the ITC to protect American businesses from unfair competition. The complaint requests that the ITC issue a permanent exclusion order and a permanent cease and desist order. In the fast-paced world of internet-based sales, every second counts. The ITC typically resolves matters in less than 18 months; district court cases can drag on for years. The ITC alone has the power to provide the requested relief in a time-sensitive manner.
Questions should be directed to Todd R. Seelman, lead antitrust counsel at: Todd.Seelman@lewisbrisbois.com.
Radwell sells and repairs industrial electrical and electronic control devices. Radwell employs nearly 900 people and has customers all over the world. Radwell strives to offer the highest degree of reliability and service, and truly cares about its customers. Radwell offers savings first, but never sacrifices quality or customer service. In addition to its commitment to continued growth, Radwell is an important part of both the local and global community and engages in ongoing efforts to give back to those communities.