The Concrete Cartel: How Sika AG and Others Fleeced Consumers in a Billion-Dollar Scam

Imagine building a home or a structure, only to find out that the concrete used in its foundation, walls, and floors was not worth the price you paid for it. In fact, you may have paid significantly more than you should have, thanks to a group of companies that conspired to fix prices and eliminate competition in the concrete admixture market. This is the reality faced by consumers like Lakewood Concrete Corporation, which has brought forth a class action lawsuit against Sika AG and several other defendants.

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The Lawsuit

Filed on December 5, 2023, in the Eastern District of Pennsylvania (Case No. PAEDCE-23-04797), the lawsuit alleges that Sika AG, together with other defendants, engaged in a long-standing conspiracy to fix prices, allocate markets, and eliminate competition in the concrete admixture market. The complaint states that these companies, which control a significant portion of the market, colluded to artificially inflate prices, resulting in overcharges to consumers.

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The plaintiff, Lakewood Concrete Corporation, claims that it purchased concrete admixtures from the defendants and paid higher prices due to their anticompetitive practices. The lawsuit seeks damages, restitution, and injunctive relief on behalf of all affected consumers.

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What are Concrete Admixtures?

Concrete admixtures are chemicals added to concrete to enhance its properties, such as workability, strength, and durability. They are essential components in the production of high-quality concrete, and their use has become increasingly widespread in the construction industry. The defendants in this case are major players in the concrete admixture market, with a significant market share.

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The Conspiracy

According to the complaint, the defendants engaged in a conspiracy to fix prices, allocate markets, and eliminate competition in the concrete admixture market. They achieved this through various means, including:

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1. Price-fixing: The defendants agreed to sell their concrete admixtures at artificially inflated prices, which were higher than they would have been in a competitive market. This resulted in overcharges to consumers like Lakewood Concrete.

2. Market allocation: The defendants allocated markets among themselves, ensuring that each company had a specific share of the market. This prevented competition and allowed them to maintain their artificially inflated prices.

3. Bid-rigging: The defendants colluded on bids for large projects, ensuring that the winning bid was always from one of the conspirators. This eliminated competition and allowed them to maintain their price-fixing scheme.

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The Harm to Consumers

The conspiracy had a significant impact on consumers like Lakewood Concrete, who paid higher prices for concrete admixtures. The overcharges were not only a financial burden but also affected the quality of the concrete used in construction projects. The use of substandard concrete can lead to structural problems, safety hazards, and costly repairs.

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The Impact on the Construction Industry

The concrete admixture market is a multi-billion dollar industry, and the conspiracy had a significant impact on the construction industry as a whole. The artificially inflated prices of concrete admixtures increased the cost of construction projects, making them more expensive for consumers and businesses. This, in turn, affected the competitiveness of the construction industry, as contractors and builders had to absorb the increased costs or pass them on to their customers.

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The Impact on the Environment

The use of substandard concrete in construction projects can have severe environmental consequences. Concrete is a significant contributor to greenhouse gas emissions, and the production of substandard concrete can lead to increased energy consumption and emissions. Moreover, the use of substandard concrete can result in structural problems, leading to the demolition and reconstruction of buildings, which further exacerbates environmental issues.

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The Need for Accountability

The conspiracy among Sika AG and other defendants highlights the need for accountability in the concrete admixture market. The defendants' actions were unethical and illegal, and they must be held responsible for the harm they have caused to consumers and the construction industry. The class action lawsuit brought forth by Lakewood Concrete Corporation is a step in the right direction, as it seeks to hold the defendants accountable and provide restitution to affected consumers.

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Conclusion

The class action lawsuit against Sika AG and other defendants highlights the importance of fair competition in the marketplace. The conspiracy to fix prices, allocate markets, and eliminate competition in the concrete admixture market had a significant impact on consumers and the construction industry. It is crucial that companies operate ethically and fairly, and that those who engage in anticompetitive practices are held accountable. We urge consumers who have been affected by this conspiracy to come forward and join the class action lawsuit to seek the justice they deserve. Together, we can ensure that the concrete admixture market operates fairly and that consumers receive the quality and value they deserve.