KFTC FINES SUPPLIERS OF AUTO PARTS

Flag_of_South_Korea_svgOn 23rd December 2013, the Korean antitrust regulator, the Korea Fair Trade Commission (“KFTC”), imposed fines of 114.6 billion won (approximately US$108 million) on a number of auto parts suppliers, including Japan’s Denso Corporation and Germany’s Bosch and Continental AG.  The charges related to the fixing of prices for car instrument panels and wipers, in particular those sold to Hyundai and its affiliate, Kia Motors.  The FTC has estimated that price collusion has affected the cost of around 11 million units.  The parts in question account for approximately 0.5% of the price of the car.

The largest fine, 63 billion won, was imposed on the Denso Corporation, which was accused of fixing prices between January 2008 and March 2012, initially with Continental AG and then with Bosch.  The FTC found that price collusion led to a sharp increase in price estimates provided by the suppliers.  Continental AG and Bosch have been fined 46 billion and 5.6 billion won respectively.

Shin Dong-kwon, Head of the Cartel Investigation Bureau at the KFTC, said, “We collaborated with antitrust regulators from the US and the EU to crack down on price collusion among auto parts makers.  And we will closely monitor international cartels targeting the Korean market in the future.

The U.S. Justice Department and antitrust enforcers worldwide have been investigating price-fixing by around 20 companies and 21 executives in the automotive industry.  To date, the corporations in question have agreed to pay $1.6 billion in fines.

This entry was posted in South Korea by Michael O'Kane. Bookmark the permalink.

About Michael O'Kane

Michael O’Kane is a partner and Head of the Business Crime team at leading UK firm Peters & Peters. Described as ‘first-rate’ (Legal 500 2012), he “draws glowing praise from commentators” (Chambers 2013) for handling the international aspects of business crime, including sanctions, extradition and mutual legal assistance. Called to the Bar in 1992 and prior to joining Peters & Peters he was a senior specialist prosecutor at the Crown Prosecution Service Headquarters(CPS). At CPS HQ he was a key member of a small specialist unit responsible for the prosecution of serious and high profile fraud, terrorist and special interest criminal matters including the Stansted Airport Afghan hijacking and the prosecution of Paul Burrell (Princess Diana’s butler). Michael joined Peters & Peters in 2002. He became a partner in May 2004, and Head of the Business Crime team in May 2009. Since joining Peters & Peters, Michael has dealt with a wide range of business crime matters. He has particular expertise in international sanctions, criminal cartels, extradition, corruption, mutual legal assistance, and FSA investigations. Described as“ an influential practitioner in fraud and regulatory work, so much so that he is top of the referral lists of many City firms for independent advice for directors” (The Lawyer’s Hot 100 2009), he was recognised as one of the UK’s most innovative lawyers in the 2011 FT Innovative Lawyer Awards and included in the list of the UK's leading lawyers in 'The International Who's Who of Asset Recovery 2012. In 2012 he was the winner of the Global Competition Review Article of the Year. Michael regularly appears on television and radio to discuss his specialist areas and he is the author of the leading textbook on the UK Criminal Cartel Offence “The Law of Criminal Cartels-Practice and Procedure” (Oxford University Press 2009). Recent/Current Sanctions Work • Representing 109 individuals and 12 companies subject to designation by the European Council under targeted measures imposed against Zimbabwe. This is the largest and most complex collective challenge to a sanctions listing ever brought before the European Court. • Acting for a former Egyptian Minister and his UK resident wife, challenging their designation by the European Council of Ministers under targeted measures brought against former members of the Egyptian Government. • Advising a company accused in a UN investigation report to have breached UN sanctions imposed in relation to Somalia. • Advising a UK company in relation to ongoing commercial relationships with an Iranian company listed under both EU and UN sanctions. • Advising an individual in relation to a UK investigation for alleging breaching nuclear export controls.

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