A federal court in Michigan on Oct. 31 dismissed the $950 million antitrust suit filed against three Chinese solar photovoltaic (PV) panel manufacturers by bankrupt firm Energy Conversion Devices (ECD).
ECD, which at one time was the world’s largest manufacturer of thin-film solar panels, was forced into Chapter 7 liquidation in 2012 after Chinese firms flooded the market with cheaper-priced PV panels. The heavily leveraged firm, which was also dependent on subsidies for its products, was unable to weather the collapse in sales that resulted.
In October 2013, the liquidating trust in charge of ECD’s assets filed suit against Trina Solar, Yingli Green, and Suntech Power, accusing the three companies of attempting to take over the market for solar panels by colluding with each other, their suppliers, and the Chinese government in a complex price-fixing scheme. ECD alleged that the scheme would allow the three companies to sell their products at artificially low prices until their competitors were forced out of business.
On Friday, the judge in charge of the case dismissed the suit, finding that ECD had failed to show injury that met the requirements of the U.S. Sherman Antitrust Act.
In making the ruling, the judge found that the three companies did not have sufficient power to recoup losses from below-market pricing by later charging higher prices once their competitors had been driven from the market. Instead, the court found that there have in fact been new entrants to the solar PV sector and that the three companies had done nothing to create barriers to entry. Without that showing, there was no evidence they would be able to take advantage of the alleged price-fixing scheme.
Last fall, a study by the National Renewable Energy Laboratory and the Massachusetts Institute of Technology found that China’s competitive advantages in the solar PV sector are due mainly to economies of scale and supply chain optimization.
Another antitrust case against the three companies by bankrupt firm Solyndra is still ongoing in a federal court in Northern California. That case survived a similar motion to dismiss in April.
—Thomas W. Overton, JD is a POWER associate editor.