Align Considers $27.5 Million to Resolve SmileDirectClub (NASDAQ:ALGN)

Align technology (NASDAQ:ALGN) agreed to pay $27.5 million to settle a lawsuit alleging that the Tempe, Arizona-based maker of clear aligners conspired to inflate prices for products sold directly by competitor SmileDirectClub (OTC:SDCCQ).

U.S. District Judge Vince Chhabria has not yet ratify a tentative settlement filed Thursday evening in federal court in San Francisco.

Once completed, the deal will cover approximately 1.45 million SmileDirectClub (OTC:SDCCQ) customers who purchased clear aligners between October 22, 2017 and August 18, 2022. In addition, Align (ALGN) has agreed to offer each customer a $300 Invisalign treatment voucher.

The proposed class action lawsuit accuses the company of violating the Sherman federal antitrust statute by agreeing not to enter the direct-to-consumer trading market in exchange for a share of profits and a minority stake in SmileDirectClub (OTC:SDCCQ).

According to the lawsuit, the 2016 agreement allowed SmileDirectClub (OTC:SDCCQ) to charge higher fees for its products.

Align (ALGN) declined to admit wrongdoing but said it settled to avoid the expense and distraction of legal proceedings, Reuters Agency said, citing court documents.

Last year, SmileDirectClub (OTC:SDCCQ) announced plans to liquidate after filing for Chapter 11 bankruptcy in September 2023.