US Consumers File Lawsuit to Block Nippon Steel’s Acquisition of US Steel

A group of US consumers has filed a lawsuit in federal court aimed at preventing Nippon Steel’s $14.9 billion acquisition of US Steel, citing concerns that the deal could reduce market competition and lead to higher prices for a range of consumer products. The lawsuit, which was filed on Wednesday in San Francisco, alleges that the proposed merger violates US antitrust laws by further consolidating the steel industry, which would likely result in negative consequences for consumers.

According to Reuters, the plaintiffs—16 consumers from states including California, Florida, Ohio, and Texas—are both direct and indirect buyers of steel-related products, such as automobiles, household appliances, and tools. They argue that Nippon Steel’s acquisition would further reduce the number of steel producers in the U.S., leaving fewer competitors in the market. This, they claim, could facilitate price-fixing and lead to unjustified price hikes.

Related: Nippon Steel Weighs Legal Action After Biden Blocks US Steel Deal

The lawsuit comes after the Biden administration intervened last month, halting the proposed acquisition on national security grounds. The government’s move prompted Nippon Steel and U.S. Steel to seek legal recourse, challenging the decision in a Washington, D.C. court. The companies labeled the decision as “blatantly unconstitutional” in a filing this week, per Reuters.

As of now, Nippon Steel has not issued any public statement in response to the consumer lawsuit. U.S. Steel, which is not named as a defendant in the case, defended the merger, arguing that it would foster a more competitive domestic steel industry. In a statement released Thursday, U.S. Steel emphasized that the acquisition would help ensure a stronger, more resilient steel sector.

The legal challenge from the consumers adds to the growing scrutiny surrounding the merger, which has garnered political attention from both sides of the aisle. While President Joe Biden’s administration blocked the deal for national security reasons, former President Donald Trump has also voiced his opposition to the acquisition.

The acquisition has already faced delays. In a move to buy more time for the legal process to unfold, the Biden administration pushed back a deadline for Nippon Steel to abandon the deal until June, offering courts more time to review the ongoing litigation.

Source: Reuters