Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Auto parts producers agree to plead guilty, pay $4M for bid rigging, (Nov 25, 2014)

By Greg Hammond, J.D.

Continental Automotive Electronics LLC and Continental Automotive Korea Ltd. have agreed to plead guilty to an information, charging that the two companies engaged in a conspiracy to rig bids of instrument panel clusters installed in vehicles manufactured and sold in the United States. The companies will be required to pay a single criminal fine of $4 million (U.S. v. Continental Automotive Electronics LLC, Criminal No. 3:14-CR-19).

According to the one-count felony information filed yesterday in the federal district court in Newnan, Georgia, both companies develop, produce, supply, and sell instrument panel clusters for use in vehicles manufactured by Hyundai Motor Co., Kia Motors Corp., and Kia Motors Manufacturing Georgia. An instrument panel cluster is a set of instruments located on a vehicle’s dashboard, which contains gauges such as a fuel gauge, odometer, speedometer, and tachometer, along with warning indicators for engine malfunction, gearshift position, low fuel, low oil pressure, low tire pressure, parking brake engagement, and seat belt.

The information alleges that the two companies (1) participated in meetings and conversations to coordinate bids for instrument panel clusters; (2) entered into agreements during those meetings and conversations to allocate sales of instrument panel clusters; (3) exchanged information on bids, price quotations, and price adjustments for submission to vehicle manufacturers, to effectuate the agreed-upon allocations; (4) coordinated and submitted bids that were the product of collusion for instrument panel clusters; (5) supplied instrument panel clusters to vehicle manufacturers at collusive and noncompetitive prices; and (6) accepted payment for instrument panel clusters supplied at collusive and noncompetitive prices.

“As the Antitrust Division’s prosecution of auto parts matters like this one demonstrates, we will prosecute those who participate in international cartels targeting U.S. businesses and consumers,” stated Deputy Assistant Attorney General Brent Snyder, for the Department of Justice Antitrust Division. “The Antitrust Division is working closely with competition enforcers around the world to ensure that companies and executives that engage in international cartel crimes find no refuge.”

Continental Automotive Electronics LLC and Continental Automotive Korea Ltd. were charged with bid rigging, in violation of the Sherman Act. They have agreed to pay a $4 million criminal fine for their roles in the conspiracy. In addition, the companies have agreed to cooperate with the Antitrust Division’s ongoing investigation.

To date, 32 companies and 46 executives have been charged in the Department of Justice’s ongoing investigation into the auto parts industry. All 32 companies have pleaded guilty or have agreed to plead guilty, agreeing to over $2.4 billion in criminal fines.

Companies: Continental Automotive Electronics LLC; Continental Automotive Korea Ltd.

News: Antitrust AntitrustDivisionNews