Telescope makers hit by class action lawsuit over alleged price fixing.
Individuals who acquired telescopes from prominent suppliers may be eligible for compensation from a $32 million class action settlement. This settlement arises from an extensive legal dispute involving telescope manufacturers linked to Chinese family-owned companies Synta Technologies and Ningbo Sunny.
Allegations in the available documentation suggest that these companies engaged in collusion to monopolize and segment the U.S. amateur telescope market, thereby manipulating prices and eliminating competition. The class action encompasses well-known brands such as Celestron, Meade, Olivon, and Sky-Watcher telescopes, which have long been integral to the toolkit of U.S. amateur astronomers. Claimants have until May 20, 2025, to seek compensation from the settlement, which received approval from the U.S. District Court in San Jose in November.
The settlement applies to telescopes purchased between January 1, 2005, and September 6, 2023, including those manufactured by Suzhou Synta Optical Technology, Nantong Schmidt Opto-Electrical Technology, Synta Canada International Enterprises, Pacific Telescope Corp, SW Technology Corporation, Sunny Optical Technology, and Sunny Optics, along with the aforementioned brands.
The purported unlawful activities of the companies involved in this class action were initially revealed by a lawsuit filed in 2016 by Orion Technologies, a California-based telescope manufacturer that is no longer in operation. Orion ultimately prevailed in the lawsuit in 2019, which accused Synta Technology, a telescope manufacturer based in Taiwan, of colluding with its primary rival, Ningbo Sunny, a company headquartered in China, to monopolize the U.S. amateur telescope market and eliminate Orion from competition.
The documents related to the class action highlight the close affiliations between these companies, which are reportedly under the direct or indirect control of David Shen and his family, the owner of Synta Technologies. The records indicate that Synta Technology facilitated Ningbo Sunny's acquisition of the well-known U.S. telescope manufacturer Meade in 2013, after having acquired Celestron, the leading telescope distributor in America, in 2005.
The U.S. Federal Trade Commission had previously blocked attempts by Celestron and other telescope manufacturers to acquire Meade due to antitrust issues, asserting that such mergers would lead to monopolistic conditions in the telescope market.
However, Ningbo Sunny was able to bypass these regulations by obscuring its connections to Synta. Post-acquisition, Synta and Ningbo Sunny reportedly reached an agreement to partition the telescope market, with Synta concentrating on the high-end amateur telescope segment through Celestron, while Ningbo Sunny focused on the budget market with Meade products, as stated in the documents. As a result of the lack of competition, American astronomy enthusiasts are alleged to have spent hundreds of millions of dollars on overpriced products over the two decades during which the conspirators dominated the market.
The class action complaint, which can be accessed online through the Telescopes Antitrust Litigation Indirect Purchaser Actions Settlement website, notes that "numerous former competitors of Synta and Ningbo Sunny have either sold off or closed their telescope operations" due to their inability to achieve the necessary sales volumes and profit margins.
The most recent casualty in the wave of telescope manufacturer closures is Orion, which, despite achieving a favorable ruling against Synta and Ningbo, unexpectedly halted its operations in July 2024. The Meade brand also did not endure, having been acquired by Orion from Ningbo Sunny in 2021. Additionally, the Olivon website is no longer operational.
The Telescopes Antitrust Litigation Settlement Administrator has not responded to multiple inquiries from Space.com, nor has Celestron. Sky-Watcher, which markets telescopes produced by Synta Technologies, stated that the company "continues to dispute all the claims and deny any wrongdoing."
Nevertheless, a spokesperson indicated that the company aims to "move past the issue" and views the settlement as a business decision "in the best interest of the company, the industry, and our customers." As a result of the settlement, the court will not determine whether the alleged conspirators violated U.S. antitrust laws.
However, in the previous Orion case, the United States District Court for the Northern District of California found the Chinese companies in violation of the Sherman Act and the Clayton Act, which prohibit anti-competitive practices.
The judge mandated that Ningbo Sunny pay $50.4 million to Orion, while Synta settled for a mere $500,000 before the case was presented to a jury. The final approval hearing for the class action settlement is scheduled for early April, after which class members will be eligible to receive compensation. According to SkyQuest, the U.S. amateur telescope market was valued at approximately $1.21 billion in 2023 and is projected to increase to $1.37 billion by 2032.
