Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Auto executive agrees to plead guilty to price fixing in automobile parts investigation, (Jun 30, 2014)

By Linda O’Brien, J.D., LL.M.

An executive of Denso Corp. has agreed to plead guilty and to serve one year and one day in a U.S. prison in connection with the Department of Justice (DOJ) Antitrust Division’s investigation into a conspiracy to fix the prices of instrument panel clusters installed in cars sold in the United States and elsewhere, the department announced today (U.S. v. Horisaki, Case No. 2:14-cr-20372).

A one-count felony charge was filed on June 27, 2014, in the U.S. District Court for the Eastern District of Michigan in Detroit against Satoru Horisaki, a group leader in Japan-based Denso’s Utsunomiya Branch Office. According to court documents, Horisaki, a Japanese national, participated in the conspiracy from about 2009 to about February 2010, by agreeing upon bids and prices for, and allocating the supply of, automotive instrument panel clusters sold to Honda of America Manufacturing Co. Inc., in the United States and elsewhere. In addition to the prison sentence, Horisaki has agreed to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. The plea agreement will be subject to court approval.

Instrument panel clusters are the mounted array of instruments and gauges housed in front of the driver of an automobile. Automobile parts suppliers submit bids to automobile manufacturers in response to their requests for quotation (RFQs) and are awarded business for the lifespan of the engine or model. Automobile manufacturers procure parts for vehicles made in the United States both in Japan and the United States.

In March 2012, Denso pleaded guilty and was sentenced to pay a $78 million criminal fine for its role in conspiracies to fix the prices of heater control panels and electronic control units. Horisaki is the sixth Denso executive to be convicted in the Antitrust Division’s investigation into the automotive parts industry. To date, 36 individuals, including Horisaki, have been charged in the DOJ’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of over $2.3 billion in fines.

Horisaki is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

“This charge is the latest effort by the Antitrust Division to hold executives accountable for engaging in anticompetitive conspiracies that do real harm to the U.S. economy,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The conspirators undermined a competitive bidding process by meeting to discuss and agree on price quotations.”

News: Antitrust AntitrustDivisionNews