Federal Judge Rules in Favor of Universal Surveillance Systems, Paving Way for Antitrust Lawsuit Against Checkpoint Systems

Rancho Cucamonga, CA, February 21, 2012 – An antitrust lawsuit filed by Universal Surveillance Systems LLC (USS) against Checkpoint Systems, Inc. (CKP) was found by U.S. District Judge John Adams of the Northern District of Ohio to meet all of the necessary requirements to proceed on all claims despite Checkpoint’s motion to dismiss.

The lawsuit by USS alleges that Checkpoint illegally attempted to suppress USS and other would-be competitors through unfair distribution agreements and a systematic campaign of exclusionary conduct to stifle competition in the market for electronic article surveillance (EAS) systems sold to food and drug retailers. According to the suit, the actions by Checkpoint, which controls at least 80 percent of the EAS market, allegedly resulted in driving up prices for security tags, limiting choices for customers, and thwarting competition in the market.

According to the lawsuit, Checkpoint attempted to thwart competition by proposing unfair distribution agreements that would have prohibited USS from selling any competing goods to Checkpoint customers while not obligating Checkpoint to distribute USS products. After USS refused, Checkpoint allegedly resorted to a systematic campaign of exclusionary conduct to stifle competition from USS and other competitors by entering into long-term, exclusive contracts that prohibited their retail store customers from doing business with rival EAS tag suppliers and bundling their EAS tags with their EAS monitoring systems to dominate the industry.

“Judge Adams’ ruling is critical to assure fair competition in the EAS industry,” said Adel Sayegh, President and CEO of USS. “Under U.S. antitrust laws, no single company has the right to unfairly suppress its competitors. When that happens, the American public loses. We believe that, as a result of Checkpoint’s actions, and retailers have paid inflated prices for inferior Checkpoint EAS tags. We look forward to moving ahead on this lawsuit and restoring healthy competition to the EAS industry.”