CHILE – Furniture manufacturer Silcosil has sued board manufacturer Masisa and its subsidiary Masisa Components Spa before Chile’s Court of Defense of Free Competition (TDLC) accusing them of “acts contrary to free competition”.

Silcosil alleges that Masisa and its subsidiary seek to run them out of business through: predatory practices; margin strangulation; cross company subsidies from Masisa to its subsidiary Masisa Componentes Spa, which would allow the latter to continue in the market despite showing losses and an increase debt level; and the copyright infringement of furniture designs developed by Silcolsil.

In the document submitted by Silcosil, with legal advice from Pellegrini & Cia, the plaintiff explains: “Masisa Componentes is trying to achieve a dominant position in that market, selling its products systematically and permanently below the cost of production to the point it has incurred huge losses since its market entry in 2011”. The plaintiff also accused of strangling margins, “Masisa Componentes has prevented Silcosil from reaching a sufficient margin between production costs and the final furniture price”, it stated.

“These behaviors not only hurt Silcosil, but also all agents involved in the market: its competitors, distributors and ultimately consumers, since persisting in this behavior, the sued companies will desplace competitors, and may in the future raise prices of furniture above the levels that would exist in conditions of competition and, in turn, strengthen the market power of its parent company”, the document states.

The TDLC has already issued a preliminary measure against Masisa, forcing her to exhibit accounting and financial records of 2014. In the brief submitted to the TDLC, Silcosil has requested the imposition of fines totaling USD 32 million for both firms (USD 16 million each one).

The Silcosil Group is a Chilean company with more than 24 years dedicated to the design, development and manufacture of furniture. It operates two production plants, the Paine factory with capacity to process 21,600 cubic meters of panels per year and factory of San Bernardo, with capacity to process 1,200 tonnes of steel. In 2014 the Silcosil Group generated sales of about USD 30 million through its various lines: RTA furniture, school furniture, furniture for real estate projects (Construction), office furniture underr the Plantalibre brand, office chairs under the Storemuebles brand, point of sale furniture under the Dot brand and sofas and under the Diqualita brand.