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LAWSUIT

Swedish firm embroiled in US antitrust lawsuit

Swedish giant Electrolux's attempt to snap up General Electric's appliance business has been met with a lawsuit by US antitrust officials, saying the $3.3 billion deal would harm consumers.

Swedish firm embroiled in US antitrust lawsuit
Swedish appliances firm Electrolux has been sued. Photo: Fredrik Persson/SCANPIX

The sale would limit competition and lead to higher prices of cooking appliances for US consumers, said the Justice Department, which filed the civil antitrust lawsuit in a US court in Washington.

The transaction “would leave millions of Americans vulnerable to price increases for ranges, cooktops and wall ovens, products that serve an important role in family life and represent large purchases for many households,” said Leslie Overton, a deputy assistant attorney general in the Justice Department's antitrust division.

“This lawsuit also seeks to prevent a duopoly in the sale of these major cooking appliances to builders and other commercial purchasers, who often pass on price increases to home buyers or renters.”

READ ALSO: Electrolux top boss denies plan to quit Sweden

The GE-Electrolux deal, announced in September 2014, covers a broad range of appliances, including refrigerators, dishwashers, dryers, air conditioners and water heaters.

Cooking appliances comprised the largest share of revenues at 35 percent, according to an Electrolux press release announcing the deal.

GE said it intends to “vigorously” defend the sale to the Swedish appliances giant and that it hopes to close the deal in 2015.

“GE continues to believe that GE Appliances' customers, consumers and employees will benefit from Electrolux's commitment to the appliance business and its ability to compete with global competitors,” the company said.

Electrolux, in a separate statement, said it “contests vigorously” the Justice Department position and will fight it in court.

“The appliances industry is more competitive than ever,” the company said.

“The acquisition is intended to enhance Electrolux scale and efficiencies in order to invest more in innovation and growth for the benefit of all consumers, retailers, employees and shareholders.”

The company's annual earnings soared to 2.24 billion kronor ($273 million) at the end of last year, following the implementation of a cost-cutting programme which saw about 2,000 workers laid off.

LAWSUIT

Sweden’s Spotify hit by new $200 million action

Swedish music streaming leader Spotify has been hit by a new copyright lawsuit seeking $200 million, in the second such case within weeks.

Sweden's Spotify hit by new $200 million action
The Swedish company has been accused of adopting "a now familiar strategy for many digital music services -- infringe now, apologize later." Photo: Erik Mårtensson / SCANPIX

The lawsuits, each filed by individual artists in a US federal court in Los Angeles, ask a judge to create a class-action suit in which other alleged victims can collectively seek damages.

The latest lawsuit was filed Friday by Melissa Ferrick, the Massachusetts-based indie folk singer who teaches at the prestigious Berklee College of Music and rose to prominence as Morrissey's last-minute opening act on his 1991 tour.

Ferrick accused Spotify, which boasts of providing a massive selection of on-demand music, of failing to inform copyright owners when it created phonorecords, the files used to provide the instant music online.

Ferrick charged that the Swedish company, not wanting to delay its growth including its US launch in 2011, took “a now familiar strategy for many digital music services — infringe now, apologize later.”

“Spotify chose expediency over licenses. Thus, while Spotify has profited handsomely from the music that its sells to its subscribers, the owners of that music (in particular, songwriters and their music publishers) have not been able to share in that success because Spotify is using their music for free,” the lawsuit said.

Ferrick said that her songs have been streamed or temporarily downloaded one million times in the past three years over Spotify but said the company did not license them as required.

Ferrick's lawsuit sought at least $200 million on behalf of copyright holders from Spotify, a private company which says it has more than 75 million users and has been valued at $8 billion.

Spotify was hit in late December by another lawsuit seeking a class-action suit filed by David Lowery, the leader of alternative rock bands Cracker and Camper Van Beethoven who is also an academic.

Lowery, whose lawsuit sought at least $150 million, also accused Spotify of failing to seek permission for copying or distributing songs.

His lawsuit had a slightly different argument, accusing Spotify of ignoring mechanical rights — the permission to reproduce copyrighted material.

In response to Lowery's lawsuit, Spotify said it was trying to compensate every rights holder but that data was often missing.

“We are committed to paying songwriters and publishers every penny,” Spotify spokesman Jonathan Prince said at the time.

Spotify says it has paid back $3 billion to music-makers, has set aside money for future payouts and is working to find technical solutions to avoid future problems.

Streaming, both on Spotify and competing services such as Apple Music and Tidal, has been rapidly growing and contributed to a net rise in music consumption in the United States last year.