Case 1:23-cv-03294-CBA-MMH Document 1 Filed 05/01/23 Page 1 of 26 PageID #: 1
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
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`STEPHEN GERBER, on behalf of himself and
`all others similarly situated,
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`Plaintiff,
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`Case No. __________________
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` CLASS ACTION
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` DEMAND FOR JURY TRIAL
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` v.
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`ENERGIZER HOLDINGS, INC. and WAL-
`MART INC.,
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`Defendants.
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`CLASS ACTION COMPLAINT
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`Plaintiff Stephen Gerber (“Plaintiff”), on behalf of himself and all others similarly situated,
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`alleges the following Class Action Complaint against the above-captioned Defendants, Energizer
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`Holdings, Inc. (“Energizer”) and Wal-Mart, Inc. (“Walmart”) (Energizer and Walmart are referred
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`to herein collectively as “Defendants”) upon personal knowledge as to himself and his own actions,
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`and upon information and belief, including the investigation of counsel, as follows:
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`I.
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`NATURE OF THE ACTION
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`1.
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`For over half a century, batteries have been a staple in American homes.
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`Consumers have used them for a multitude of household purposes, including for cooking
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`appliances, medical devices, radios, flashlights, cordless phones, and other electronics. According
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`to Statista, in 2020, Americans bought over $5 billion dollars-worth of household-use batteries;
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`meaning, Americans consume roughly $15 worth of household-use batteries per person, per year.
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`2.
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`About half of all batteries purchased for household use are disposable batteries,
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`while the other half are rechargeable batteries. Generally, disposable batteries differ from
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`rechargeable batteries in that they are disposed after use and cost significantly less at retail. This
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`Action, which is specific only to the market for disposable batteries in the United States (the
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`“Relevant Market”), focuses on the conduct of a monopolist in the United States’ disposable
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`batteries market, Energizer.
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`3.
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`Both Defendants have an outsized role to play in the Relevant Market. Energizer
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`is the largest producer of disposable batteries in the United States, and Walmart is the largest
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`distributor of said batteries in the United States. Energizer has an over 50% market share in the
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`Relevant Market. Walmart, the largest retailer in the world, is responsible for between 8.5% and
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`20% of Energizer’s overall sales per year between 2012 and 2021. Both Energizer and Walmart
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`have profited and continue to profit from the sale of Energizer’s batteries through Walmart’s
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`channels of online and in-person commerce.
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`4.
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`As the Relevant Market suffered due to advances in technology (e.g., less need for
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`batteries in electronics products) as well as the rising popularity of rechargeable devices such as
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`smartphones, computers, and electronics appliances, disposable battery use has become
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`increasingly confined to low-tech applications like flashlights, television remotes, smoke alarms,
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`and other small, less sophisticated devices. Consumers, too, have become less enthusiastic
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`regarding disposable batteries in light of the negative environmental impact of disposable batteries
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`and are therefore purchasing less disposable batteries as compared to previous generations.
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`Finally, many of the uses for batteries (such as remote-control devices for televisions) have been
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`replaced by applications on smartphones, which rendered many of the aforementioned low-tech
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`uses for disposable batteries obsolete.
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`5.
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`Faced with this new reality, rather than innovate or create new ways to sell products
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`to consumers, Defendants instead chose to violate federal and state antitrust laws in order to line
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`their pockets to the detriment of American consumers.
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`6.
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`Defendants took a two-pronged approach in an overarching conspiracy to fix, raise,
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`stabilize, or otherwise illegally impact prices in the Relevant Market, causing consumers to pay
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`supracompetitive prices for Energizer’s disposable batteries. The way that this was done is as
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`follows. First, Energizer agreed to inflate its wholesale prices above competitive levels in the
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`Relevant Market to its direct consumers other than Walmart. The resulting distortion of prices
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`allowed Walmart to elevate its retail prices above competitive levels, forcing non-Walmart
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`retailers, like the ones that Plaintiff and the members of the Class purchased from, to charge higher
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`prices at retail than they otherwise would have. Second, Energizer agreed with Walmart to an
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`unlawful pact, under which all non-Walmart retailers, like the ones that Plaintiff and the members
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`of the Class purchased from, were required to charge prices for disposable batteries that were equal
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`to or greater than the prices offered at Walmart. Put differently, any competitor of Walmart could
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`sell Energizer batteries, so long as Walmart was not undercut on price to consumers.
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`7.
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`To advance the goal of reaping supracompetitive profits from the conspiracy, and
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`to protect Walmart’s sale of Energizer’s disposable batteries, Energizer created a team known
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`internally as “Project Atlas.” Project Atlas policed Energizer’s non-Walmart customers’ retail
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`prices. If these competitors tried to undercut Walmart on price for Energizer’s disposable batteries,
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`they would be admonished by Energizer. This corrupted any competition within the Relevant
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`Market for disposable batteries at any store that sold Energizer’s disposable batteries other than
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`Walmart, thereby depriving consumers of choice, quality, and the ability to shop around for better
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`prices (i.e., competitive pricing).
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`8.
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`To further advance the goal of reaping supracompetitive profits from the
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`conspiracy, and to protect Energizer’s market share of Energizer’s disposable battery sales in
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`Walmart’s stores, Walmart allowed Energizer’s largest competitor (Duracell) to sell its products
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`at Walmart only at the same or higher prices than that of Energizer. This corrupted any competition
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`internally in Walmart’s stores for disposable batteries and kept Energizer from being undercut in
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`the Relevant Market, thereby depriving consumers of choice, quality, and competitive pricing in
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`the Relevant Market.
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`9.
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`Individually and collectively, both prongs of the conspiracy caused consumers who
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`bought Energizer disposable batteries at any retailer other than Walmart to pay supracompetitive
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`prices for those batteries. As such, Plaintiff, on behalf of himself and all others similarly situated
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`who bought disposable batteries in the Relevant Market from January 1, 2018 through the present
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`(“Class Period”), brings this Action against Defendants under Section 1 of the Sherman Antitrust
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`Act and state antitrust laws to recover actual damages, treble damages, statutory damages,
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`injunctive relief, and equitable relief for restraints of trade.
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`II.
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`JURISDICTION AND VENUE
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`10.
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`This Court has subject matter jurisdiction under Section 16 of the Clayton Act to
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`secure injunctive and declaratory relief against Defendants for violating Section 1 of the Sherman
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`Antitrust Act (15 U.S.C. 1).
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`11.
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`This Court also has subject matter jurisdiction pursuant to the Class Action Fairness
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`Act, 28 U.S.C. § 1332, as there are over 100 putative class members, the damages alleged exceed
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`$5,000,000 exclusive of costs and interest, and there is minimal diversity – namely, Plaintiff is
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`from a different state than at least one Defendant. In particular, Plaintiff is a New York resident
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`whereas Defendant Walmart is a resident of Arkansas and Defendant Energizer is a resident of
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`Missouri.
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`12.
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`This Court has personal jurisdiction over each Defendant because, inter alia: (a)
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`the Defendants transacted business throughout the United States, including in this District; (b)
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`manufactured, sold, shipped, and/or delivered substantial quantities of disposable battery products
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`throughout the United States, including this District; (c) had substantial contacts with the United
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`States, including this District; and/or (d) engaged in an antitrust conspiracy that was directed at
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`and had a direct, foreseeable, and intended effect of causing injury to the business or property of
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`persons residing in, located in, or doing business throughout the United States, including this
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`District.
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`13.
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`The activities of the Defendants and all co-conspirators, as described herein, were
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`within the flow of, were intended to, and did have direct, substantial, and reasonably foreseeable
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`effects on the interstate commerce of the United States.
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`14.
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`Venue is appropriate in this District because one or more Defendants resided or
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`transacted business in this District, is licensed to do business or is doing business in this District,
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`and because a substantial portion of the affected interstate commerce described herein was carried
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`out in this District.
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`III.
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`PARTIES
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`Plaintiff
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`15.
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`Plaintiff Stephen Gerber is and was a New York resident at all times relevant to this
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`Action. During the Class Period, and while residing in New York, Plaintiff purchased Energizer
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`batteries from a retailer other than Walmart for his own use and not for resale. Plaintiff suffered
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`injury in the form of overpayment for disposable batteries as a result of the conduct as alleged
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`herein.
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`Defendant Energizer Holdings, Inc.
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`16.
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`Defendant Energizer Holdings, Inc., a leading manufacturer of disposable batteries,
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`is based in Missouri.
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`Defendant Wal-Mart Inc.
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`17.
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`Defendant Wal-Mart Inc., which operates thousands of retail stores in the United
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`States, is based in Arkansas.
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`IV.
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`FACTUAL ALLEGATIONS
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`A. The Disposable Battery Market
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`18.
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`Disposable batteries are single-use power sources and are typically powered by
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`alkaline or lithium. Disposable batteries come in standard sizes (e.g., AA, AAA, etc.), defined
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`according to standards adopted by the American National Standards Institute or International
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`Electrotechnical Commission. Disposable batteries are used in toys, flashlights, remote-controls,
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`smoke detectors, and some power tools, among many other similar electronic devices. Disposable
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`batteries are mature products that have seen little innovation in the last several decades.
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`19.
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`The disposable batteries industry is characterized by high barriers to entry. Many
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`disposable batteries contain cobalt, lithium, and graphite, which are considered critical minerals
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`by the United States Geological Survey, e.g., minerals with a high supply risk potential and for
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`which there are no easy substitutes.
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`20.
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`Safety concerns and regulations impose additional substantial barriers to entry.
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`Disposable batteries are manufactured using metals such as mercury, lead, cadmium, and nickel.
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`Lead and mercury are hazardous materials, and waste from battery manufacturing creates costly
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`environmental contamination problems. As such, legacy battery manufacturers (with in-place
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`manufacturing capacity and associated regulatory permits) have a strong advantage over any
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`would-be new entrants to the market.
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`21.
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`Advertising is another barrier to entry for new entrants into established markets like
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`the disposable battery market. Energizer has invested hundreds of millions of dollars in advertising
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`to build its brand. Energizer spends an estimated $70-80 million a year in advertising, principally
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`to distinguish itself from Duracell, its chief rival. Energizer and Duracell together account for
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`approximately 85% percent of total U.S. disposable battery sales, and Energizer by itself accounts
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`for over 50% of those sales. Each company has market power.
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`22.
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`The recent market outlook for disposable batteries has been bleak. The
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`conventional wisdom is that with advances in technology, and the rising popularity of
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`smartphones, videogames, and online games, alkaline battery use will increasingly be limited to
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`flashlights, smoke alarms, and a few other low-tech applications.
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`23.
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`High technology and advanced circuitry also increasingly produce smaller
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`consumer devices that are powered with rechargeable or renewable power sources, further limiting
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`disposable battery use.
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`24.
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`Consumer demand for disposable batteries has also been dampened by
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`environmental concerns. Many consumers appropriately prefer rechargeable batteries to protect
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`the environment.
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`25.
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`Disposable batteries thus face a declining market outlook, have been losing sales to
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`renewable batteries, and are being displaced by new technology in devices that do not require
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`batteries to operate.
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`B. Walmart’s Dominance in Retail Sales Makes It A Critical Seller for Battery
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`Manufacturers
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`26.
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`At the retail level for disposable batteries, there is a single dominant firm, Walmart.
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`27. Walmart is the only retailer Energizer references in Energizer’s annual SEC filings:
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`“Although a large percentage of our sales are attributable to a relatively small number of retail
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`customers, in fiscal year 2020, only Wal-Mart Stores, Inc. accounted for ten percent or more
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`(14.1%) of the Company’s annual sales.”
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`28. Walmart has historically been a large part of Energizer’s revenues.
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`29.
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`In 2013, Energizer lost an exclusive contract with Walmart to supply batteries to
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`Walmart’s discount chain, Sam’s Club.
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`30.
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`The effect that losing the contract had on Energizer’s sales illustrates Walmart’s
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`dominance as a retailer and its importance to Energizer. The year before losing the contract,
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`Walmart purchases constituted 20% of Energizer’s overall sales. Just one year later, that
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`percentage dropped to 13.3%, and the next year, to 8.5%.
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`31.
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`The drops in sales to Walmart had corresponding effects on Energizer’s bottom
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`line: Energizer missed earnings and profit estimates in 2014 and 2015, and its share price suffered.
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`C. The Defendants Agree to the Conspiracy
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`32.
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`As early as January 2018, Walmart and Energizer again agreed to a deal that would
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`give Energizer’s products preferential treatment in Walmart stores, and the downward trend
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`reversed. After falling to as low as 8.5%, Energizer’s Walmart sales rebounded to around 14% of
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`all Energizer sales starting in 2019.
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`33. Walmart and Energizer’s agreement extended beyond Walmart giving Energizer
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`disposable batteries preferential treatment at its stores. Under pressure from Walmart, Energizer
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`agreed to the conspiracy, which shielded Walmart from price competition from other retail sellers
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`of Energizer batteries and allowed both Walmart and Energizer to charge supracompetitive prices.
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`34.
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`The conspiracy had two components. First, Energizer agreed with Walmart to
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`artificially inflate the wholesale prices it charged to Walmart’s competitors for Energizer batteries
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`to prevent them from undercutting Walmart’s retail prices. Second, Energizer agreed with
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`Walmart to monitor Walmart’s competitors to ensure that those competitors did not charge lower
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`retail prices for Energizer batteries than Walmart, and to discipline those competitors that did.
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`35.
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`Energizer created a group called Project Atlas to fulfill its obligations to Walmart
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`under the agreement. Project Atlas policed Energizer’s customers’ retail prices and raised
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`wholesale prices as necessary to force Energizer’s customers to maintain retail prices that did not
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`undercut Walmart’s.
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`D. Energizer and Walmart Implement the Conspiracy
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`36.
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`37.
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`By April 2018, Energizer had increased its prices by over 8% from the prior year.
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`That same year, at Walmart’s behest, and in furtherance of the conspiracy,
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`Energizer’s Project Atlas policed Walmart’s competitors’ retail prices for Energizer batteries and
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`disciplined competitors and other retailers for underselling Walmart,.
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`38.
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`For example, in November 2018, Project Atlas disciplined Walmart’s horizontal
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`competitor in the Relevant Market, Portable Power, Inc. (“Portable Power”), for its pricing of
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`Energizer headlamps, a battery product sold by Walmart and, at that time, Portable Power.
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`39.
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`Acting on complaints from Walmart, Energizer raised its wholesale prices for
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`headlamps to Portable Power to, in turn, force Portable Power to raise its retail prices to match or
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`exceed Walmart’s.
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`40.
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`As explained in an internal email sent by Energizer manager Jeffrey Stoll, Energizer
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`had received complaints from Walmart regarding “disruptive pricing on Amazon & Wal-Mart.com
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`on headlights and specialty batteries.” Walmart asked Energizer what it was doing to “resolve”
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`the issue.
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`41. Mr. Stoll mentioned Portable Power by name as a driver of the “disruptive pricing.”
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`42. Mr. Stoll’s email highlighted Portable Power as selling at “disruptive” prices —
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`i.e., lower and more competitive prices — and noted the link between reining in Portable Power’s
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`retail pricing and Energizer’s efforts to maintain high prices across retail distribution channels.
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`43.
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`Energizer recognized the disruption that competitors such as Portable Power would
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`have on Walmart’s sales of Energizer batteries generally. Raising prices to Portable Power and
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`Energizer’s other direct purchasers would have the effect of diminishing competition in the retail
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`market, to the benefit of Walmart.
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`44.
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`Energizer understood that raising wholesale prices to Portable Power and other
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`retailers would increase retail prices.
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`45.
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`Energizer explained that, with headlamps as well as other battery products: “[W]e
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`are selling to Portable Power, Inc. at [wholesale] pricing that would allow them to be disruptive
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`on e-commerce. Anything we can do to influence pricing with Portable Power will be key to
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`reducing the disruption in the [North American] market.”
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`46.
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`To bring Portable Power’s retail pricing up to the level of Walmart’s pricing,
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`Energizer raised its wholesale prices to Portable Power for headlamps by about 50-85%.
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`47.
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`At that time (in November 2018), Energizer’s Stephanie Rice, a sales representative
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`that worked with Portable Power, told Portable Power’s CEO that Energizer was raising Portable
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`Power’s prices to align them with Energizer pricing policy. Energizer did not tell Portable Power
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`that the price increases Energizer was imposing were because of the conspiracy.
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`48.
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`This policy was new to Portable Power, which had purchased disposable batteries
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`and battery products from Energizer for years and represented a material change in Energizer’s
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`pricing policy.
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`49.
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`Additionally, and critically to consumers like Plaintiff and members of the Class,
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`Energizer also began rolling out widespread wholesale price increases for direct purchasers other
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`than Walmart in accordance with the conspiracy.
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`50.
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`For example, in the second quarter of 2019, Energizer announced an 8% price
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`increase for its Energizer® Max Alkaline Batteries and Energizer® Ultimate Lithium Batteries.
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`51.
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`This announced price increase enabled Walmart to increase its prices for these
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`batteries by an even greater margin: nearly 20% in the third quarter of 2019, and by nearly 40%
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`by the first quarter of 2020.
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`52.
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`In May 2019, the month before the price increase was announced, Walmart priced
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`a 24-pack of Energizer Max Alkaline AAA batteries at $12.78. By July 2019, just two months
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`later, Walmart had raised the price to $16.24, a 27-percent increase. This price change was non-
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`transitory. The average price of this product in the 12 months before the wholesale price increase
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`was $12.71, and the average price in the 12 months after the wholesale price increase was $16.18.
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`53.
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`Energizer continued to impose similar price hikes at regular intervals in 2020 and
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`2021.
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`54.
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`In September and October 2020, Energizer raised prices across its product lines by
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`at least 10%. In April 2021, Energizer raised prices on its MAX line of batteries by at least 10%.
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`And in June 2021, Energizer raised prices across its household battery portfolio by 11%.
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`55.
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`Energizer implemented its price increases because of its agreement with Walmart
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`and at Walmart’s behest.
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`56.
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`Energizer understood that raising its wholesale prices to its direct customers would,
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`in turn, increase the retail prices its direct customers charged at retail. These price increases were
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`intended to force retailers competing with Walmart in selling Energizer disposable batteries to
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`increase their retail prices up to or above Walmart’s.
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`57.
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`In January 2021, Energizer again targeted Portable Power for underselling
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`Walmart.
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`58. Ms. Rice forwarded an email from Energizer’s Project Atlas team to Portable
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`Power’s CEO, informing him that Portable Power was among the top-ten Amazon sellers “in
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`violation” of Energizer’s “pricing policies” — meaning, Portable Power’s retail prices were below
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`the price floor Energizer had set with Walmart for December 2020.
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`59.
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`An internal email communication from Energizer’s Colby Mowery, a member of
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`Energizer’s trade and price strategy team, to Energizer manager Brad Sellenriek confirmed that
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`Energizer’s Project Atlas had contacted Portable Power because of Energizer’s agreement with
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`Walmart.
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`60. Mr. Sellenriek forwarded the message to Ms. Rice and clarified that Portable Power
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`was being asked to raise its retail prices: “Stephanie- Please see the latest situation on [Portable
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`Power]. Before we shut them off on these [products], let’s see if he’s willing [to] revise his pricing
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`and get him off the radar.”
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`61.
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`Following these messages in January 2021, Energizer increased various wholesale
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`prices to Portable Power for Energizer batteries in accordance with its agreement with Walmart.
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`Energizer also told Portable Power the minimum price it had to charge (e.g., Walmart’s price to
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`avoid being terminated as a distributor.
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`62.
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`Energizer repeatedly warned Portable Power that if Portable Power did not increase
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`its retail prices to match or exceed Walmart’s, it would be cut off from purchasing batteries from
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`Energizer.
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`63.
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`On or about February 1, 2021, Ms. Rice warned Portable Power that, because
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`Portable Power had not raised its retail prices to match Walmart’s, Energizer would stop shipping
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`certain Energizer batteries to Portable Power. When Portable Power’s CEO discussed Energizer’s
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`decision with Ms. Rice later that day, she admitted that Energizer had adjusted its pricing policies
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`at Walmart’s request, telling him “This is 1000% about Walmart and wanting the best price.”
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`64.
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`According to Ms. Rice, Energizer inflated its wholesale prices for Energizer
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`batteries to Portable Power and other wholesalers to force them to sell at or above Walmart’s retail
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`prices.
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`65.
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`Later that month, Energizer again quoted wholesale prices to Portable Power that
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`were based on Walmart’s prices, this time for Ray-O-Vac hearing aid batteries.
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`66. Ms. Rice again said that Energizer was requiring Portable Power to match a floor
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`created by Walmart’s price for these products. In an email message dated February 16, 2021, Ms.
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`Rice offered Portable Power a wholesale price that would allow it a 20% markup if it matched
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`Walmart’s retail price: “If the items are priced to match the Walmart selling price minus 20%
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`would that work for you?”
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`67. Ms. Rice was offering a wholesale price to Portable Power that was 20% below
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`Walmart’s retail price so that Portable Power could have a sufficient markup if it set its retail prices
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`at or above Walmart’s retail prices.
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`E. Market Forces Cannot Explain Energizer’s Price Increases
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`68.
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`Energizer’s price increases cannot be explained by other market forces. The price
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`of lithium was flat or declining for the periods before and after the announced price increases. The
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`cost of the four other commodities that make up 90% of the inputs to disposable batteries — steel,
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`graphite, manganese, and zinc — also do not explain Energizer’s price increases.
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`69.
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`Increased demand does not explain Energizer’s wholesale price increases either.
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`Energizer battery prices, like disposable battery product prices generally, have been increasing in
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`the last four or five years despite a reduction in demand because of competition from disruptive
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`technologies, as detailed above.
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`70.
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`On April 17, 2018, the Wall Street Journal reported that price increases at both
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`Energizer and Duracell — which together control about 85% of the market for Alkaline batteries
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`— were at odds with competitive market forces: “Batteries on average cost 8.2% more than a year
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`ago, while prices in the overall household-care segment rose only 1.8%, according to Nielsen. At
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`a time when prices are stagnating on everything from toilet paper to diapers, such pricing power
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`for a product that is increasingly obsolete has confounded shoppers.”
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`71.
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`Nor can the price increases be explained by general inflation. Inflation was under
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`2% when Energizer announced its 2019 and 2020 price increases, 2.6% in March 2021 when
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`Energizer announced its 10% price increase, and 5% in May 2021 when it announced its 11% price
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`increase.
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`F. The Conspiracy Benefits Walmart and Energizer to the Detriment of Competition
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`72.
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`The conspiracy benefited both Walmart and Energizer. First, Energizer agreed to
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`inflate its wholesale prices to Walmart’s competitors. That enabled Energizer to enjoy inflated
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`Case 1:23-cv-03294-CBA-MMH Document 1 Filed 05/01/23 Page 15 of 26 PageID #: 15
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`prices paid by those competitors. It also enabled Walmart to artificially inflate its retail prices for
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`Energizer batteries without being undercut by other retail sellers of Energizer batteries.
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`73.
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`Second, Energizer agreed to prevent its direct purchasers from undercutting
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`Walmart’s retail prices. Energizer further inflated its prices to retailers, like Portable Power, that
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`chose to compete on price, ultimately driving them out of the market if they did not comply. That
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`enabled Walmart to artificially inflate its prices by an additional increment.
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`74.
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`The greatest potential threat to the conspiracy was Duracell. Duracell could have
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`attempted to gain market share from Energizer through pricing. But Walmart deprived Duracell
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`of the single largest opportunity to compete: Walmart stores. Walmart protected its own inflated
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`prices for Energizer batteries by charging similarly inflated prices for Duracell batteries. That
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`benefited Walmart. It also protected Energizer from its greatest competitive threat. With Walmart
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`stores unavailable for price competition, Duracell had a material incentive to charge higher prices
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`to its direct purchasers than it would have charged in the absence of the conspiracy.
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`75.
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`In this way, the conspiracy facilitated inflated duopolistic pricing and vice-versa.
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`On one hand, the anticompetitive agreement supported higher duopolistic prices than Energizer
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`and Duracell would have otherwise charged. The conspiracy distorted Duracell’s incentives,
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`making it less attractive for Duracell to compete on price and more attractive to match Energizer’s
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`prices. On the other hand, the duopolistic Relevant Market was particularly susceptible to the
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`conspiracy. Conspiracies to artificially inflate prices are more likely to succeed and more stable
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`in markets with, as here, a small number of dominant market players.
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`G. The Conspiracy Harms Competition and Consumers Alike
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`76. While the conspiracy caused antitrust injury to both companies’ direct competitors,
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`the largest harm caused is the harm to consumers who purchase disposable batteries as affected by
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`Case 1:23-cv-03294-CBA-MMH Document 1 Filed 05/01/23 Page 16 of 26 PageID #: 16
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`this conspiracy. This is because, indirect purchasers, like Plaintiff and Class members, cannot pass
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`off the overcharges they incur from the purchases made in the Relevant Market. In contrast, direct
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`purchasers, like Portable Power and other retail stores (i.e., Target, Amazon, Costco, etc.) can at
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`least try to pass along Energizer’s overcharges to consumers.
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`77.
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`Consumers were harmed in the form of reduced price competition, higher prices in
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`the Relevant Market for Energizer’s disposable batteries, reduced choice, throttled incentives for
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`innovation, and stagnated product offerings.
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`78.
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`This is due, in part, because (i) direct purchasers are being sold products at inflated
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`prices at retail due to Energizer’s pricing decisions and agreements with Walmart, and (ii) the
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`agreement between Walmart and Energizer does not allow Energizer to sell Energizer’s disposable
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`battery products at other retailers for cheaper prices, which has the effect of fixing the entire market
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`for Energizer’s products. And, because Energizer represents over 50% of the Relevant Market,
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`and because of the effects on Duracell’s pricing as detailed herein, consumers do not have a choice
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`but to pay supracompetitive or inflated prices for products in the Relevant Market. Energizer’s
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`reaping of supracompetitive profits and insulated market share allow it to continue to raise prices
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`on consumers. Further, the policing of other retailers who do not price in lockstep with Walmart
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`hurts consumers who do not purchase directly from Walmart, like Plaintiff and the putative Class
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`members, who are forced to pay at least a much as the prices that Walmart charges.
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`H. The Relevant Market and Market Power
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`79.
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`The relevant product market consists of the market for disposable battery products.
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`There are no reasonable substitutes for disposable batteries for the vast majority of uses for which
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`they are purchased. Rechargeable batteries are not reasonable substitutes for disposable batteries
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`because they are significantly more expensive and do not hold a charge as long. This makes them
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`an impractical choice for the types of applications for which disposable batteries are usually used,
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`particularly applications that require low power output or infrequent power draws for a longer
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`period of time than rechargeable batteries, such as for smoke alarms, children’s toys, flashlights,
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`etc.
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`80.
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`The relevant geographic market consists of the United States, and its territories,
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`possessions, and the Commonwealth of Puerto Rico.
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`81.
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`Energizer has substantial market share within the Relevant Market, controlling
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`more than 50% of the market. Most of the rest of the market belongs to Duracell. Together with
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`Duracell, Energizer has duopoly power, as explained above.
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`82.
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`Energizer’s power in the market for disposable battery products also gives it power
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`over price and market power over disposable-battery dominated products.
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`83.
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`Direct evidence establishes Defendants’ combined power in the Relevant Market
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`and over all disposable battery products. That direct evidence includes Defendants’ ability to
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`inflate prices above competitive levels profitably and sustainably. It also includes: (i) Energizer’s
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`multiple large price increases since January 2018 that it implemented under its agreement with
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`Walmart and that cannot be explained based on competitive forces; and (ii) the decrease in the
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`number of retail sellers that purchase batterie