Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canada Competition Bureau announces sixth guilty plea in motor vehicle component investigation, (Aug 21, 2014)

By Linda O’Brien, J.D., LL.M.

The Canada Competition Bureau announced yesterday that DENSO Corporation, a Japanese supplier of motor vehicle components, pleaded guilty to three counts of bid-rigging under the Competition Act and was fined Can $2.45 million by the Ontario Superior Court of Justice (East Region) for its participation in an international bid-rigging conspiracy.

The evidence showed that DENSO conspired with other Japanese automotive components manufacturers to coordinate their respective responses and to agree on which party would win bids submitted in response to requests for quotations to supply Toyota Motor Manufacturing Canada Inc. with certain motor vehicle components.

DENSO’s plea is in connection with body electronic control units (ECUs) supplied to Toyota for the following models manufactured in Canada: the 2003-2004 Lexus RX and Corolla; the 2005-2007 Lexus RX and Corolla; and the 2008 Lexus RX and Corolla. A body ECU controls the power supply to certain electrical components in the body of the automobile, such as door locks and electric windows.

The Bureau learned of cartel activity in the motor vehicle components industry through its Immunity Program, after which it began its investigation in December 2009. The investigation also benefitted from the cooperation of numerous companies under the Bureau’s Leniency Program.

The Bureau’s investigations involving this industry relate to a series of alleged conspiracies and bid-rigging agreements or arrangements among various suppliers in the sale and supply of components used in the manufacture of motor vehicles in Canada and elsewhere, primarily by Japanese original equipment manufacturers.

"Today’s guilty plea by DENSO is yet another example of the Bureau’s on-going pursuit of criminal behavior related to the supply of auto parts to Canadian-based automobile manufacturers. The Bureau will continue to pursue those alleged to have committed crimes in relation to the supply of motor vehicle components and in other sectors of the Canadian economy," said Matthew Boswell, Senior Deputy Commissioner of Competition.

This is the sixth guilty plea arising from the Bureau’s investigations involving motor vehicle components, with nearly Can$52 million in fines imposed by the courts since April 2013. In April 2013, Yazaki Corporation was fined Can$30 million for rigging bids for wire harnesses and Furukawa Electric Co., Ltd. was fined Can$5 million for rigging bids for electrical boxes. JTEKT Corporation was fined Can$5 million for rigging bids for automotive wheel hub unit bearings in July 2013. In January 2014, NSK Ltd. was fined Can$4.5 million for rigging bids for automotive wheel hub unit bearings and in February 2014, Panasonic Corporation was fined Can$4.7 million for rigging bids for certain types of switches and sensors.

DENSO responded today, in a press release, saying that it was the company’s policy to comply with all applicable competition laws. DENSO group companies have taken various measures, including implementing more stringent compliance rules, more enhanced compliance training and more meticulous compliance monitoring, so as to further ensure that employees comply with all applicable competition laws.

The company also announced that the National Development and Reform Commission (NDRC) of China has imposed monetary sanctions on certain automotive suppliers for violation of China’s Anti-Monopoly Law in connection with sales of certain automotive components. The monetary sanctions include a fine of 150.56 million yuan (approximately 2.5 billion yen) on DENSO Corporation. The NDRC investigation involved certain automotive suppliers, including DENSO Corporation, and the company has fully cooperated with the authority.

Companies: DENSO Corporation

News: Antitrust