Tuesday, January 31, 2012

Corruption: Two Japanese Companies, Four Execs Guilty in Automobile Parts Bid-Rigging and Price-Fixing Conspiracies


On January 30, the Department of Justice and the FBI announced that two Japanese suppliers of automotive electrical components agreed to plead guilty and pay a total of $548 million in criminal fines for their role in multiple price-fixing and bid-rigging conspiracies in the sale of parts to car makers in the United States. Four executives, all Japanese nationals, also agreed to plead guilty and serve prison time in this country.

One of the companies engaged in three separate conspiracies to rig bids and fix prices of automobile wire harnesses, instrument panel clusters, and fuel sends, while the other engaged in conspiracies to rig bids and fix prices of electronic control units and heater control panels. All of these parts are essential to the wiring, circuit boards, gauges, and fuel tanks of automobiles.

According to FBI Detroit Special Agent in Charge Andrew Arena, “This criminal activity has a significant impact on automotive manufacturers in the U.S., Canada, Japan, and Europe and had been occurring for at least a decade.” Acting Assistant Attorney General Sharis Pozen said that the subjects “carried out the conspiracies by agreeing during meetings and conversations to allocate the supply of the products on a model-by-model basis and to coordinate price adjustments requested by automobile manufacturers in the U.S. and elsewhere.”

The case—worked by the FBI’s Detroit Field Office, the Department of Justice’s National Criminal Enforcement Section of its Antitrust Division, and the FBI’s International Corruption Unit—was coordinated with international antitrust partners in Japan, the European Union, and Canada. This is the second round of charges in an ongoing international cartel investigation of price fixing and bid rigging in the auto parts industry.