SD Card Price-Fixing Class Action Lawsuit

A federal antitrust class action lawsuit claims SD-3C, Panasonic, Toshiba and Sandisk are a “price-fixing cartel” that conspired to fix the price of SD flash memory cards in the United States.

SD cards – the small, portable memory drives used to record images, sounds and other data – have become the de facto standard for “point and shoot” cameras, notebooks, cell phones and other small consumer devices, comprising as much as 80% of the market. According to the SD card class action lawsuit, SD-3C owns the trademarks that certify a product is compliant with SD standards, and uses this to their advantage.

“No manufacturer can make an SD card without a license to the design patents on the form factor that must be obtained from SD-3C. Otherwise, the card will not physically fit into the slot in the host device nor will the leads match their counterpart connections in the host device. Furthermore, copyrights on the specifications must be obtained from the SD-3C or its re-sellers, as they are essential to designing SD cards into host devices to match electrical performance and timing that needed network compatibility, among other things,” the SD card class action states. “Each cartel member has also given authority to the SD-3C to license what have been characterized as nine essential utility patents and other unidentified essential utility patents for SD cards.”

The SD card class action lawsuit claims each “cartel” member refuses to license their utility patents that they claim are essential to the SD card individually or separately from the SD-3C. As a result, price competition in the sale of SD cards has been restrained, suppressed and/or eliminated in the U.S.; prices for SD cards have been fixed and raised as artificially high, non-competitive levels; and those who have purchased SD cards from the defendants have been deprived of the benefits of free and open competition.

The SD-3C, Panasonic, Toshiba and Sandisk class action lawsuit is brought on behalf of all U.S. persons that purchased in the United States for their own use and not for resale SD cards during the class period. It is also seeking to represent a subclass of all California residents. It is seeking damages and an order prohibiting the defendants from continuing the alleged misconduct.

A copy of the SD-3C, Panasonic, Toshiba and Sandisk SD Card Price-Fixing Class Action Lawsuit can be read here.