David Protein Responds to Antitrust Lawsuit Alleging Monopolistic Practices
In a high-profile antitrust lawsuit, defendants including David Protein and its cofounder Peter Rahal have filed a vigorous response against allegations of monopolization involving the acquisition of fat replacer manufacturer Epogee.
Background of the Legal Dispute
The lawsuit was initiated shortly after David Protein announced its acquisition of Epogee, leading three competing food companies—OWN Your Hunger, Lighten Up Foods, and Defiant Foods—to claim that they no longer had access to Epogee’s EPG, a novel fat replacer. The plaintiffs allege that David and Epogee engaged in “secretive and collusive conduct” to create an artificial monopoly and violate federal antitrust laws, alongside New York’s Donnelly Act.
Response from Defendants
In a detailed 30-page memo submitted to the court, the defendants countered that the plaintiffs’ claims stemmed from poor business planning rather than unlawful monopolization. They argue that the plaintiffs failed to secure long-term supply contracts for EPG despite its importance to their businesses.
“Plaintiffs want the court to rescue them from a predicament they created for themselves,” the memo states, emphasizing that patent holders, such as Epogee, are under no obligation to sell their products to third parties.
Business Practices and Market Dynamics
David Protein and Epogee assert that the market for fats and fat substitutes remains competitive, with numerous alternatives available to consumers. They noted that other companies proactively negotiated long-term supply agreements to ensure access to EPG, contrasting this with the plaintiffs’ approach.
The plaintiffs claim to have invested heavily in research and development around EPG, which they describe as their “secret sauce” ingredient. In contrast, the defendants highlight that David Protein’s proactive measures, including securing a supply agreement before the acquisition, demonstrate sound business strategies.
Antitrust Claims and the Legal Framework
The defendants further contend that the plaintiffs have not established any unlawful monopolization or monopoly power in the relevant market. David Protein is described as a minor player in the protein bar sector, while Epogee occupies a small niche in the fat substitute market.
The argument posits that the plaintiffs’ definition of the relevant market as solely EPG, only produced by Epogee, lacks legal grounding for monopolization claims.
Impact of Market Changes
As Epogee refines its business strategy to focus on profitable, high-volume customers, the defendants argue that this shift is pro-competitive. They contend that pursuing profitability is not anticompetitive and that the reallocation of focus from small-volume customers can enhance market competition overall.
Claims of Supply Manipulation
The plaintiffs allege that Epogee manipulated supply conditions by reporting EPG shortages and withholding orders during the acquisition period, resulting in significant operational issues for their businesses. They assert this was a deliberate strategy to benefit from the acquisition while harming former competitors.
Response from Plaintiffs
A representative of the plaintiffs criticized the defendants for attempting to downplay the legal violations articulated in their initial claims. They argue that David Protein is disregarding established legal principles while seeking to monopolize a product that has been vital to numerous other businesses.
Understanding EPG
EPG, or esterified propoxylated glycerol, has gained attention for its unique properties. Created by modifying plant-based oils, EPG can be listed as ‘EPG (modified plant-based oil)’ on food labels. This ingredient boasts significantly lower caloric content compared to traditional fats, making it attractive for use in health-focused products.
Conclusion
The legal tussle between David Protein, Epogee, and the complaint-filing companies promises to unfold further in court, with implications for the competitive landscape of the food industry. As more details emerge, stakeholders and industry insiders will closely monitor the development of this antitrust case.
*The case is identified as OWN Your Hunger, Lighten Up Foods, and Defiant Foods vs Linus Technology (operating as David Protein), Epogee, and Peter Rahal, filed in the Southern District of New York on June 2, 2025. Case: 1:25-cv-04544.
