On the eve of becoming the first privately held company to provide satellite launch services, SpaceX has filed suit against Boeing Company and Lockheed Martin Corporation, charging both companies with conspiracy, anti trust, and racketeering.
Their lawsuit charges that "Boeing and Lockheed Martin have engaged in an unlawful conspiracy to eliminate competition in, and ultimately to monopolize, the government space launch business and prevent SpaceX and other potential new entrants from competing in that business."
Should anyone be surprised that these two companies, long time beneficiaries of lucrative defense contracts, would try to keep competition from cutting into the massively profitable satellite launch services? It will be interesting to watch this battle unfold. For years there have been cries for more private sector involvement in the space program, as a way to reduce the cost to taxpayers through competitive bids for government contracts.
With SpaceX only a week away from launching its inaugural commercial rocket (to place a NGA payload into a stable earth orbit) it appears that Elon Musk and his group have discovered some behind the scenes activity, designed to lock them out of the government space launch business.
The suit charges the following:1) Violation of Section 1 of the Sherman Act
2) Violation of Section 2 of the Sherman Act
3) Violation of Section 7 of the Clayton Act
4) Violation of Racketeer Influenced and Corrupt Organizations Act
5) RICO Conspiracy
6) Violation of the Cartwright Act (Unreasonable Restraint of Trade)
7) Violation of the Cartwright Act (Conspiracy To Monopolize)
8) Violation of Section 17200 of California's Business & Professional Code
The Full Summons is well written and worth the time to download (2.9 MB). It goes into great detail about the methods used by Boeing and Lockheed Martin to shut out SpaceX and other potential competition from the EELV market.
Article comments
1 - R. Goddard
If you think satellite launch services are "massively profitable", I know some Nigerian gentlemen who would like your assistance with certain matters regarding international monetary transfers.
2 - Dave Nalle
With Bush's interest in the space program and his avowed belief in free enterprise he could earn a lot of credit if he took notice of this situation and like Teddy Roosevelt, stepped in to help set things right and stop the monopolistic abuses.
Dave
3 - Bennett
Agreed Dave, just this weekend there was another call (by NASA/WH)for private industry to take over the resupply of the ISS. To allow Boeing and Lockheed Martin to lock out competition based on the premise "Well, we cheat and lie, and steal each other's secret pricing - so you should just pay the "going rate" for these here launches" is patently criminal.
R. Goddard - if it wasn't massively profitable, why are we dealing with this type of crooked, behind the scenes manipulation?
If SpaceX can deliver a payload to orbit for 7-35 million dollars, tens of millions of dollars less than Boeing or Lockheed Martin, can we afford to let them have a monopoly on launch services through 2012?
4 - ranndino
The author and others that have commented automatically assume that the law suit is correct in its charges.
I've followed SpaceX since they've come into existance and would like to see them succeed. However, let's hold off judgement on the lawsuit since none of us really have any idea whether there's any merit to it.
Also, it is hardly logical to make claims that your vehicles have better reliability and are cheaper to launch when none have made a single flight yet. Doesn't anyone see a slight problem with SpaceX doing that? Russians, who have ages of experience with launching vehicles into space recently dumped a very expensive, private payload into the ocean.
Speaking of expenses. If you think in terms of a launch costing let's say $500 million for the payload and $50 million for getting it to space than the savings become less significant. What matters most in such cases is reliability and at this point in time SpaceX has not proved anything. I don't think it will happen, but for all we know they rockets might nose dive upon launch.
So to the blogger and some of the commenters... Don't jump to conclusions and let your political views and preconcieved notions affect your judgement.
5 - Bennett
ranndino - agreed, however...
The lawsuit has merit if all it accomplishes is keeping the door open for SpaceX to bid on the launches of Air Force payloads between now and 2011. At 100 million per launch to the ISS via Soviet Soyuz, and comparable prices for payloads via Atlas IV, SpaceX should have the opportunity to provide these services for a substantially lower price.
With almost weekly calls by NASA, and the US government, for participation by private industry vendors of launch services to step forward, it seem hypocritical to enter into long term exclusive launch arrangements with Boeing and Lockheed Martin.
That's what the lawsuit is all about. Granted, SpaceX has yet to launch, and the delay of their maiden flight from 31 October to an unspecified date later this month is raising more than a few eyebrows. I tried to get more information from SpaceX, a reason for the delay, and was told:
"The reason for the delay is in the e-mail we distributed: we are extending Merlin qualification by four weeks for added surety. We want to ensure our maiden flight is successful and would rather take our time qualifying a brand new engine than rush to get to the launch pad."
I penned a rather sarcastic reply, and then never sent it. All along the lines of "What? You didn't KNOW it was a new engine when you set the 31 Oct launch date?
So, we'll see how it goes in a week or so.
Thanks for the comment!
6 - ranndino
Just came back to this page after seeing it in Google results for my nick. Well, as we now know the maiden voyage did not exactly go as planned despite the delay for additional preparations.
7 - Bennett
Yeah, sux. But, the engine fire was interesting, and they have deep pockets.
Stay tuned.
8 - ranndino
Yes, sad indeed. My first comment on here from November 14 proved to be Nostradamian indeed (I also make up new words in my spare time).
"for all we know their rockets might nose dive upon launch".