Antitrust Law Daily Wrap Up, ANTITRUST NEWS—E.D. Mich.: Former Takata Corp. director indicted for conspiracy to suppress automotive parts competition, (Jun 6, 2014)

By Greg Hammond, J.D.

Gikou Nakajima, a previous Director of the Customer Relations Division of Takata Corporation, has been indicted for allegedly participating in a combination and conspiracy to suppress and eliminate competition in the automotive parts industry in Michigan and elsewhere, according to a U.S. Department of Justice press release (U.S. v Nakajima, June 5, 2014, Battani, M).

Takata is a Japanese company that sells automotive parts, such as seatbelts, to automobile manufacturers, including Toyota Motor Corporation, Honda Motor Company, Ltd., Nissan Motor Co., Ltd., Fuji Heavy Industries, Ltd., and Mazda Motor Corporation. The company, through its subsidiary—TK Holdings Inc.—has also supplied automotive parts to automobile manufactures in the U.S. The indictment alleges that various corporations and individuals participated as co-conspirators in the purported offenses.

Combination and conspiracy. According to the indictment, Takata allegedly participated in a combination and conspiracy to suppress and eliminate automotive parts industry competition by “agreeing to rig bids for, and to fix, stabilize, and maintain the prices of, seatbelts sold to” automobile manufacturers in the U.S. and elsewhere. Nakajima allegedly participated in the combination and conspiracy, in unreasonable restraint of interstate and foreign trade and commerce and in violation of the Sherman Antitrust Act.

Specifically, the Antitrust Division alleged that Nakajima participated, directed, authorized, or consented to subordinate employees: participating in meetings and communications regarding bids and price quotations to be submitted to U.S. automobile manufacturers; agreeing on such bids and price quotations; and allocating supplies of seatbelts sold to U.S. automobile manufacturers on a model-by-model basis. Nakajima is also accused of approving the collusive and noncompetitive prices; submitting such bids and price quotations to U.S. automobile manufacturers; selling and accepting payment for seatbelts sold to U.S. automobile manufacturers at collusive and noncompetitive prices; and participating in meetings and communications for the purpose of monitoring and enforcing the agreed upon bid rigging and price-fixing scheme.

“Today’s indictment demonstrates that the Antitrust Division continues to hold accountable executives who collude with their competitors,” stated Antitrust Division Deputy Assistant Attorney General Brent Snyder. “The division will not tolerate executives participating in—and directing their subordinates to participate in—conspiracies to raise the prices on automotive parts that are essential to the safety of U.S. consumers.”

Nakajima is one of 35 individuals that the have been charged as part of the government’s continuous investigation into price fixing and bid rigging in the U.S. automotive parts industry. He faces a maximum penalty of ten years in prison and a $1 million criminal fine.

The case number is 2:14-cr-20324.

Cases: Antitrust AntitrustDivisionNews MichiganNews