Glamour by Issam, Exotica Corp. Named in Antitrust Class Action Alleging ‘Predatory Collusion’ in Beauty Products Market

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A proposed class action lawsuit filed in Georgia against Glamour by Issam, Exotica Corp., and three individuals with control over the companies alleges the group agreed to fix prices while conspiring to monopolize the market for certain beauty products. To accomplish this, the plaintiffs allege, the defendants, since at least 1998, have “allocated customers, diverted products, and engaged in group boycotts of nonparticipating competitors,” among other supposed conduct, ultimately overcharging everyday customers.

“The participants in the groups have, since at least 1998, conspired to fix prices by agreeing to periodic coordinated price increases, which they typically did by diverting a particular product or group of [products] and saturating the market,” the complaint adds. “The scheme has even run some beauty brands out of business through predatory collusion and other exclusionary acts.”

The complaint later elaborates on one of the methods the defendants would allegedly use to take out certain beauty product competitors:

“From time to time, [the defendants] would target a particular beauty brand, in-demand. [The individual defendants] would contact the brand and see if the brand wanted to work with [the defendants] by selling products to them.

If the brand was unwilling to cooperate then [the individual defendants] would [get] in contact [with] the brand via [the business defendants] to deceive the brand into selling them the professional-only beauty products.

Once [the defendants] obtain the products at distributor pricing, they would [work] with its conspirators to make it more difficult or impossible for brand to sell its products at the set retail or manufacturer price, as [the defendants] would divert and would be able to offer steep discounts or inflated pricing at their whim and directly to consumers.”

Even further, the lawsuit claims the defendants have gone so far as to create fake businesses, with the goal of diverting additional products from competitors, such as the plaintiffs, and misleading other beauty brands into selling them “professional only” products. The lawsuit notes the defendants allegedly received support for their competition-quelling scheme from non-defendants Quality King, Pro’s Choice Beauty Care, Inc. and Primary One.