The US Justice Department announced on 26 September 2013 that nine Japanese companies and two executives have agreed to plead guilty and pay more than USD 740 million in criminal fines for their roles in a number of conspiracies to fix prices in the car manufacturing sector.
The companies and executives engaged in various price-fixing schemes in relation to more than 30 different car components which affected more than USD 5 billion in auto parts used in more than 25 million cars sold in the US market. The companies and executives have admitted to attending meetings and making telephone calls in the US and Japan to rig bids, set prices and allocate the supply of parts sold to car manufacturers. Those involved took measures to keep their cartel conduct secret by using code names and meeting in remote locations.
The largest fines have been imposed on Hitachi Automotive Systems Ltd., Jtekt Corporation, Mitsuba Corporation and Mitsubishi Electric Corporation (MELCO) who have all agreed to pay in excess of USD 100 million. The two executives, US citizen Gary Walker and Japanese citizen Tetsuya Kunida, will serve 14 and 12 month prison sentences respectively and will each pay a USD 20,000 fine. All parties have admitted to violations of the Sherman Act and agreed to cooperate with the ongoing investigation
The fines are the latest in the Department of Justice’s ongoing investigation into the automotive sector (see previous blog post). The investigation has so far seen 20 companies and 17 executives plead guilty and has cost the auto industry more than USD 1.6 billion in fines and resulted in prison sentences of between a year and a day and two years.
What is now the largest cartel investigation in US history in terms of criminal fines and number of companies and executives under investigation looks set to continue. Eric Holder, the US Attorney General said at a press conference to announce the plea deals “The Department of Justice will continue to crack down on cartel behviour that causes American consumers and businesses to pay higher prices for the products and services they rely upon in their everyday lives”