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Justice Department Accuses Assa Abloy of Antitrust Settlement Violation

 |  July 3, 2024

The U.S. Justice Department has accused Swedish lock maker Assa Abloy of violating a settlement agreement tied to its $4.3 billion acquisition of Spectrum Brands’ hardware and home improvement unit last year. According to Reuters, the allegations, filed in a Washington, D.C. court on Tuesday, claim that Assa Abloy has failed to compensate a court-appointed monitor overseeing the company’s adherence to the settlement terms.

Allegations of Payment Default

The Justice Department’s filing asserts that Assa Abloy ceased payments to the monitor, Hausfeld’s Melinda Coolidge, in February. This action, according to the filing, represents a breach of the settlement agreement which was designed to resolve antitrust claims. The original lawsuit by the Justice Department aimed to block the acquisition on the grounds that it would lead to increased prices in the market.

Dispute Over Monitor’s Role and Fees

The settlement, reached during a trial before U.S. District Judge Ana Reyes, did not include an admission of wrongdoing by Assa Abloy. However, the terms required the company to fund a monitorship to ensure compliance. Coolidge, the U.S. managing partner at Hausfeld, a major plaintiffs’ firm, charges $920 per hour for her services. In an April letter to Assa Abloy, she dismissed the company’s objections to her fees as “unfounded.”

In June, Assa Abloy formally objected to Coolidge’s fees, arguing that the costs could surpass $20 million over the monitorship period. The company has requested the court to limit Coolidge’s scope, claiming she overstepped her authority by proposing an industry-wide, five-year study on smart locks. The Justice Department contends that this study is a crucial part of her mandate.

The Justice Department has requested a court order to compel Assa Abloy to resume payments. A hearing on this matter is scheduled for July 9 before Judge Reyes. Both Assa Abloy and Coolidge have not responded to requests for comments, while the Justice Department has declined to comment on the ongoing case.

Assa Abloy, known for brands such as Yale, August, and EMTEK, acquired Spectrum’s division, which includes Baldwin and Kwikset brands. This case, United States v. Assa Abloy and Spectrum Brands, is being heard in the U.S. District Court for the District of Columbia.

Source: Reuters