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Jury Says GE Used Unfair Practices to Control Anesthesia Repair Business

GE plans appeal, says it had no duty to train competitors or to sell parts directly to them.

Published: May 3, 2017

SLEEPING GIANT GE says competitors were abusing its warehousing and logistics services.

General Electric, one of the largest manufacturers of anesthesia gas machines in the country, wanted the service and repair business all to itself, a band of small repair companies from across the country alleged in its antitrust suit. A Texas federal jury agreed, unanimously ruling last week that GE had a nationwide monopoly on the servicing and repair of its anesthesia machines and awarding nearly $44 million in damages to 17 anesthesia businesses, an amount that's expected to be tripled under antitrust legislation.

The smaller companies claimed that GE began refusing to sell them parts for its machines at wholesale prices in 2011. Instead, they complained, GE designated one distributor for its parts, Alpha Source, which charged 18% to 20% above GE's published list prices. Meanwhile customers that bought parts directly from GE were given 20% to 40% discounts, said the smaller firms, rendering competition "incredibly difficult, if not impossible."

In addition to making it difficult to get parts for the machines, GE also created a policy that made it impossible for the plaintiffs to get their service technicians trained on new models of GE machines, the repair shops allege — "and the hospitals won't let you work on them unless you're trained on them," says Sam Baxter, the lawyer who represented the smaller companies tells Texas Lawyer. Mr. Baxter also says GE policy let his clients contract for repairs at only one hospital at a time.

GE denied that it had monopoly power and argued that its policies were legitimate and a matter of self-defense. It enlisted Alpha Source, it said, to reduce the burdens caused by independent companies who, it claimed, were abusing GE's warehousing and logistics services. Furthermore, it had no duty to train competitors or to sell parts directly to them, it said, adding that no evidence suggested that customers had been harmed by its policies.

"GE values appropriate market access to our life-saving technologies," says GE spokeswoman Holly Roloff in a statement. "Although we are disappointed by the verdict, we stand by our values and plan to appeal the decision."

In a statement, Mr. Baxter called the verdict "a call for fairness in business, and a real victory for the little guys that were brave enough to take on a major corporation."

Jim Burger


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