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Toshiba is considering suing Sony over faulty batteries that have forced a global recall by at least eight computer manufacturers, in a move that could put more pressure on the embattled Japanese consumer electronics maker.
This is the first time a company affected by the Sony lithium ion battery recall has indicated it might seek compensation.
Toshiba, which is recalling 830,000 batteries from its notebook PCs worldwide, said on Monday it was considering legal action against Sony to secure compensation for lost business and the damage done to its brand image as a result of the recall.
“We expect Sony will pay for the cost of replacing the batteries. But there is also the impact on the business…We are receiving many calls asking whether [our PCs] are safe,” Toshiba said, adding that it was looking at various options but “nothing has been decided yet”.
The threat of legal action comes as Sony is struggling to restore confidence in its products following revelations that its lithium ion batteries used in laptops can cause fires under certain conditions. The battery recall is expected to cost Sony up to Y40bn ($336m), according to analysts. That figure is based only on the cost of replacing the faulty batteries.
Whether other manufacturers are considering legal action is unclear. Fujitsu, which is also co-operating with the battery recall, said on Monday it had not noticed any clear impact from the recall on its sales or brand image but was “still studying the situation”.
In August, Dell said it was recalling 4.1m notebook PC batteries made by Sony in the largest consumer product recall involving the US Consumer Product Safety Commission. Apple Computer, Lenovo, Toshiba, Fujitsu, Hitachi and Sharp soon followed with their own recalls.
Dell, the world’s biggest personal computer maker, on Monday said only that its recall was “going as planned”. A spokesman declined to be drawn on whether the company would consider legal action. “We don’t have any further comment to make, at this time,” he said.
Apple also declined to comment, saying “our first priority is to recall and replace the defective batteries free of charge to our customers”.
There are fears the recalls could have wider ramifications, such as a decline in Sony’s battery business and growing fears about the safety of lithium ion batteries themselves.
The latter concern and the potential negative impact on their brand image are leading many PC makers to recall products even though there have been no incidents related to the batteries emitting flames.
Toshiba’s decision to consider legal action also reflects a growing awareness among Japanese companies of the need to avoid shareholder lawsuits.
Suing Sony could be difficult since it would be hard for companies to prove loss of business or damage to their brands were due to the battery problem alone, says Fumio Osanai, an analyst at UBS in Tokyo.
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