The US Justice Department announced on 19 July 2013 that Panasonic and its subsidiary Sanyo Electric have agreed to plead guilty and pay USD56.5 million in fines for two separate conspiracies to fix the prices of auto parts and battery cells. Battery maker LG Chem Ltd. has also agreed to plead guilty to price fixing of battery cells and to pay a fine of USD1.1 million. The announcement follows the guilty pleas entered by Diamond Electric and an executive with Swedish company Autoliv on 16 July 2013. Panasonic will pay USD45.8 million and Sanyo USD10.731 million. All three companies have agreed to cooperate in the on-going investigations and charges have been filed for violations of the Sherman Act.
Panasonic was charged with three counts of cartel activity going as far back as 1998. Two of these involved bid-rigging and price fixing of steering wheel switches, turn switches, ballasts and other parts sold to Toyota in two separate conspiracies. The third count involved fixing the prices of ballasts used for lamps sold to Honda, Mazda and Nissan. All of the affected parts were installed in cars sold in the United States and elsewhere. Panasonic was said to have agreed with its competitors to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids and fix, stabilise and maintain part prices. The company has issued a statement saying that it has taken steps to strengthen its compliance programmes.
Sanyo Electric and LG Chem were charged in a separate conspiracy of fixing the prices of cylindrical lithium ion battery cells used in laptops sold worldwide between 2007 and 2008. These are the first guilty pleas in the on-going investigation into price fixing in the cylindrical lithium ion battery cell industry. The companies agreed to price the battery cells at pre-determined levels and then took steps to monitor the agreements and conceal the conspiracy.
This is the latest penalty to result from the on-going investigation into the auto parts industry which has so far seen 12 companies and 15 executives plead guilty and has cost the auto industry more than USD874 million in fines and resulted in prison sentences of between a year and a day and two years. Substantial fines have also been imposed in parallel investigations in Europe, Australia, Korea, Japan and Canada.