Reports on a USA legal news website says that a USA drywall company has filed a class action antitrust lawsuit against nine major drywall manufacturers accusing them of conspiring to fix and raise the prices for gypsum board. The defendants collectively control 99 percent of the gypsum board sold in the United States and Canada, according to the class action lawsuit.

Sierra Drywall Systems Inc. alleges in the drywall price-fixing class action lawsuit that Georgia-Pacific LLC, American Gypsum Company LLC and seven other defendants forced consumers to pay inflated drywall prices starting in January 2012 with a large, coordinated price hike. The price-hike also
included new restrictions on the supply of gypsum board made available to distributors.

“Faced with a weak market with no immediate prospect of rebound, the defendants nevertheless announced a large spike in the price of gypsum board. This increase was not supported by competitive conditions and thus could not have been sustained absent the defendants’ agreement to raise prices,” the drywall antitrust class action lawsuit states.

Sierra Drywall says the defendants are planning a second substantial price hike for 2013.

The class action lawsuit goes on to say that the defendants abruptly stopped using a common practice called “job quotes” that allowed customers to lock in a price for gypsum board for the duration of a construction project. According to Sierra, eliminating job quotes facilitated the alleged collusion by making pricing more consistent and making it easier for the companies to detect anyone who deviated from the conspiracy.

Sierra further alleges that significant barriers for entry into the gypsum board market have aided the alleged drywall conspiracy by keeping out new competitors that could undermine their price-fixing.

The class action lawsuit points out that drywall price fixing is nothing new. In the 1970s, six gypsum makers were convicted of criminal antitrust violations, and in 2002 the European Union fined four gypsum companies $455 million for fixing the prices of drywall in the 1990s.

The drywall price-fixing class action lawsuit is seeking treble damages for a proposed class of all direct purchasers who bought gypsum board since January 1, 2012.