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Complaint Filed Over Alleged Restraint Of Trade In Jukebox Industry

Posted On: 2/19/2013

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TAGS: juke box, jukebox restraint of trade allegation, restraint of trade complaint, U.S. District Court for the district of Massachusetts, Rowe International Corp., AMI Entertainment Network Inc.), a jukebox manufacturer, Amusement and Music Operators Association, jukebox operator, Lease America, Lease Inc., JukesDirect, Ecast Inc., Amusement and Music Owners Association of New York

WORCESTER, MA -- A complaint has been filed in the U.S. District Court for the district of Massachusetts that alleges Rowe International Corp. (AMI Entertainment Network Inc.), a jukebox manufacturer, and the Amusement and Music Operators Association, which represents vending operators, are involved in restraint of trade.

Shrewsbury, MA-based Lease America, or Lease Inc., filed the complaint in January accusing AMOA of pressuring Rowe not to supply jukeboxes to Lease America, which sells amusement equipment to locations.

The complaint charges that in early 2009 AMOA advised the manufacturer that its operator members would no longer use Rowe jukeboxes if it allowed Lease America to sell its jukeboxes directly to locations. According to the complaint, Rowe terminated its agreement with Lease America March 10, 2009, and remotely disabled Lease America's jukeboxes without warning.

As a result, Lease America said it has suffered financial injury, and is seeking damages, which it wants the court to determine. To date, the company estimates that its losses are more than $10 million. The plaintiff also demands a jury trial.

The complaint, which alleges violations of the Sherman Act, unfair business practices under Massachusetts's general law and several types of tortious interference, says coconspirators also are involved in the purported restraint of trade, but it did not say who they are.

The complaint mentions two other direct-selling organizations that it asserts have experienced similar pressures. San Francisco-based Ecast Inc., a jukebox music provider that shut down a year ago, supplied software and content to both operations, which earned the disapproval of the Amusement and Music Owners Association of New York.

Overall, Lease America's claim argues that the coin machine industry's supply chain -- manufacturer, distributor and operator -- is struggling to preserve a tradition, which it says inhibits innovation and competition.

A spokesman for Chicago-based AMOA told VT that the allegations made against the association in the complaint are baseless and that it is ready to challenge those claims in the legal system.