Antitrust Suit Claims Rental Companies Conspired to Inflate Construction Equipment Prices

A new lawsuit filed in Chicago federal court accuses United Rentals, the largest construction equipment rental company in the U.S., along with several competitors, of conspiring to artificially inflate rental prices for excavators, cranes, and other construction vehicles. The suit, brought by Illinois-based Zags Roofing, alleges that these companies colluded with a data analytics firm to exchange nonpublic inventory and pricing information, violating antitrust laws and leading to overcharges for small businesses and other renters.

According to Reuters, the plaintiffs claim that United Rentals, Sunbelt Rentals, and other unnamed defendants partnered with Rouse Services, a company that provides revenue management software. This software, the lawsuit argues, was used to set pricing benchmarks for the industry, allowing the companies to adjust prices without the usual competitive pressures. The rental companies allegedly gained the ability to raise prices without concern of being undercut by rivals.

The lawsuit emphasizes that these actions primarily harmed small businesses that rely on construction equipment rentals for their operations. “The victims are those companies shouldered with the responsibility of building our nation’s housing, commercial centers, and infrastructure,” said Gary Smith Jr., an attorney from the law firm Hausfeld, one of the firms representing the plaintiffs.

Rouse Services, which is also named in the suit, and its parent company, RB Global, did not respond to requests for comment. Similarly, United Rentals and Sunbelt Rentals have yet to comment on the matter.

United Rentals, headquartered in Stamford, Connecticut, reported a revenue of $15 billion last year, underscoring the financial scale of the alleged actions. According to the lawsuit, the construction rental market has seen significant consolidation over the last two decades, with numerous acquisitions by the dominant players, making it harder for smaller firms to compete on price.

The suit points to a period before Rouse’s data services took over, when rental companies set prices independently, based on their own costs and market demand. With the advent of revenue management platforms like Rouse’s, this dynamic allegedly shifted, giving the large rental companies the tools to manipulate prices across the market.

The plaintiffs’ legal teams, which include Berger Montague, Hausfeld, and Edelson, estimate that the potential class could include hundreds of thousands of businesses. In addition to monetary damages, the lawsuit seeks a court order to dismantle the alleged price-fixing conspiracy.

Revenue management platforms have been under scrutiny in other industries as well, including the hotel and residential rental markets, where similar allegations of price-fixing have been made. According to Reuters, the outcome of this case could set a significant precedent for how such platforms are used in industries that rely on competitive pricing.

Source: Reuters