Photo by Jeff Rubenstone/ENR

ICP announced its deal with Lonking and IronPlanet to great fanfare at CONEXPO 2014, but it was barely a month later when problems began to emerge.

Equipment importer International Construction Products filed an antitrust lawsuit in U.S. District Court in Wilmington, Del., on Jan. 29, alleging that manufacturers Caterpillar, Komatsu America and Volvo Construction Equipment sought to suppress the entry of Chinese-made equipment into the U.S. market. The suit focuses on a collapsed deal between ICP and online auction site IronPlanet but also alleges that the equipment manufacturers' U.S. dealer-network exclusivity agreements are anticompetitive and violate antitrust laws.

Established in early 2014, ICP sought to bring Chinese-made heavy equipment into the U.S., which has proven a difficult market for China-based equipment manufacturers to break into. At CONEXPO-CON/AGG in March 2014, ICP announced it had struck a deal with online equipment seller IronPlanet to sell new excavators and wheel loaders from China-based Lonking. At the time, ICP Chairman Tim Frank told ENR the deal was intended to grant Chinese-made equipment a way around entrenched U.S. dealer networks.

But despite a flurry of initial interest from Chinese manufacturers, the deal apparently soured quickly. According to the complaint filed in federal court by the firm Boies, Schiller & Flexner LLP, which is representing ICP, equipment manufacturers, including Caterpillar, Komatsu America and Volvo CE, threatened to boycott IronPlanet over its arrangement with ICP. ICP asserts in the complaint that this is a violation of U.S. antitrust laws.

"International Construction Products is an innovative competitor in the heavy-construction equipment market, which has notoriously high barriers to entry to new competition," said David Boies, chairman of Boies, Schiller & Flexner, which filed the suit. "The defendants in this case, some of the largest incumbent heavy-equipment manufacturers, acted illegally to exclude ICP from the U.S. market by depriving it of access to efficient distribution."

The issue of possible anticompetitive practices by IronPlanet is complicated by the company's own structure. Caterpillar and the other manufacturers are among the equipment website's largest investors, and their machines form the bulk of IronPlanet's offerings. ICP's equipment offerings initally were hosted on IronPlanet but branded as a separate ICP store within the site. According to the complaint, when ICP sought the names of the manufacturers threatening to boycott IronPlanet, IronPlanet's president responded, "You know who our investors are."

ICP is seeking compensatory and punitive damages from the three companies and for the December 2014 merger of IronPlanet and Caterpillar Auction Services to be broken up. It also asserts the exclusive agreements between the three companies and their dealers are anticompetive and should be unwound.

Caterpillar, Komatsu America and Volvo CE declined to comment on ongoing litigation.