Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: GEICO alleges auto parts manufacturers’ price-fixing conspiracy, (Sep 6, 2016)

By Michael Menzhuber, J.D., LL.M.

Automotive parts manufacturers Autoliv, Hitachi Automotive Systems, Ltd, Nippon Seiki, Panasonic, T. Rad, and TRW engaged in a conspiracy to unlawfully fix auto parts prices and allocate markets in the United States, according to a complaint filed by auto insurer GEICO Corporation in the federal district court in Detroit (GEICO Corporation v. AutoLiv, Inc., September 2, 2016).

The complaint alleges that the defendants, along with other manufacturers and suppliers, unlawfully fixed prices, rigged bids, and allocated markets and customers in the United States for certain auto parts products. These products included: air flow meters, alternators, ATF warmers, electronic throttle bodies, fuel injection systems, high intensity discharge ballasts, ignition coils, instrument panel clusters, inverters, motor generators, occupant safety restraint systems, radiators, starters, steering angle sensors, switches and valve timing control devices.

According to the complaint, as a direct result of the defendants’ anticompetitive and unlawful conduct, GEICO has paid and reimbursed its insured and claimants for artificially inflated auto parts from as early as 1999 through the present time. To effectuate their conspiracy, the defendants participated in secret meetings and conversations to fix prices paid by repair professionals, original equipment manufacturers, and automotive dealers with respect to auto parts sold in the United States.

Conditions in the auto parts industry are particularly favorable to collusion. Specifically, the unique characteristics include high barriers to entry, inelasticity of demand and standardization of auto parts, a unique cultural of cooperation, and a high market concentration, the complaint alleges.

The complaint asserts claims for relief under Section 1 of the Sherman Act, state antitrust statutes, and state consumer protection statutes. The complaint also asserts a claim for unjust enrichment.

The action seeks: (1) a judgment that the defendants’ conduct was a violation of the state and federal antitrust laws and constituted unjust enrichment; (2) damages and treble damages; (3) a permanent injunction enjoining the continuance of the alleged conspiracy; (4) restitution that includes a disgorgement of defendants’ profits obtained as a result of their acts of unfair competition and unjust enrichment; (5) pre- and post-judgment interest; (6) costs of the suit and attorneys’ fees; and (7) any other just and proper relief.

The case is No. 5:16-cv-13189-JEL-APP.

Attorneys: Kelly A. Myers (Myers & Myers PLLC) and Dan Goldfine, Frederick J. Baumann, and Diane R. Hazel (Lewis Roca Rothgerber Christie LLP) for GEICO Corporation.

Companies: GEICO Corporation; Autoliv, Inc.; Autoliv ASP, Inc.; Autoliv B.V. & Co.; Autoliv Safety Technology, Inc.; Autoliv Japan Ltd.; GEICO Corporation; Hitachi Automotive Systems, Ltd; Nippon Seiki Co.; N.S. International, Ltd.; New Sabina Industries, Inc.; Panasonic Corporation; Panasonic Corporation of America; T. Rad Co. Ltd; T. Rad North America, Inc.; TRW Deutschland Holding GmbH; and TRW Automotive Holdings Corporation.

News: Antitrust StateUnfairTradePractices MichiganNews