Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Foreign manufacturers allegedly conspired to fix prices of machinery bearings, (Jun 9, 2015)

By Linda O’Brien, J.D., LL.M.

Foreign manufacturers of automotive and industrial machinery bearings have engaged in a conspiracy to artificially inflate and fix the prices of bearings sold in the United States from January 2000 to the present, according to a complaint filed in the federal district court in Detroit (DALC Gear & Bearing Supply Corp. v. Koyo France SA, June 5, 2015).

Bearings are friction-reducing devices that allow moving parts to glide past one another and are commonly found in fans, motors, wheel bearings, and multiple car components. Koyo France SA, Koyo Deutschland GMBH, Nachi Technology, Inc., Nachi Europe GMBH, NSK Europe Ltd., Schaeffler Technologies GMBH & Co. KG, FAG Kugelfisher GMBH, AB SKF, SKF GMBH, NTN Walzlager GMBH, and NTN-SNR Roulements SA are manufacturers of automotive and industrial machinery bearings that are imported and sold in the United States. DALC Gear & Bearing Supply Corp., McGuire Bearing Company, and Sherman Bearings Inc. are distributors and exports of bearings and power transmission products.

The complaint states that a global investigation began in Europe in 2010 when several European original equipment manufacturers brought a complaint to the European Commission (EC) that the bearings manufacturers may have violated antitrust rules. In March 2014, the EC issued fines against six of the defendant companies for their involvement in a price fixing conspiracy in connection with the sale of automotive bearings. Additional antitrust investigations into the bearings industry are being pursued by the U.S. Department of Justice, Japan Fair Trade Commission, Canada Competition Bureau, Australian Competition and Consumer Commission, Competition Commission of Singapore, and Korea Fair Trade Commission.

According to the complaint, as a result of these global investigations, the defendant companies and company executives have agreed to pay millions of dollars and euros in fines and have pleaded guilty to criminal charges that they participated in a conspiracy to suppress competition and fix prices of bearings sold to automobile and component manufacturers.

The structure of the bearings market made it conducive to price fixing and market allocation, with features such as substantial barriers to entry, high market concentration, inelastic demand, homogeneous products, excess capacity, and opportunities to conspire. High level representatives of the defendant companies frequently communicated with each other to discuss the general business climate and coordinate prices for many customers. The defendants and their co-conspirators also had opportunities to meet while attending industry events. NSK, NTN, Schaeffler, Nachi, Koyo, and SKF are members of the World Bearing Association, which provided another avenue for the manufacturers to conspire as well as conceal their collusive activities, the complaint states.

The defendants affirmatively concealed their anticompetitive conduct from January 2000 through March 2014, when antitrust investigations of bearings manufacturers became public. During that time, the plaintiffs did not and could not have discovered the relevant facts giving rise to their claims, despite due diligence. The defendants represented to the public that their pricing activities were unilateral and coordinated their wrongful conduct in secret, using means and methods designed to avoid detection, the complaint alleges.

The plaintiffs assert claims for horizontal price fixing in violation of Section 1 of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 2:15-cv-12068-DML-RSW.

Attorneys: David H. Fink and Darryl Bressack (Fink + Associates Law) for DALC Gear & Bearing Supply Corp., McGuire Bearing Company, and Sherman Bearings Inc.

Companies: DALC Gear & Bearing Supply Corp.; McGuire Bearing Company; Sherman Bearings Inc.; Koyo France SA; Koyo Deutschland GMBH; Nachi Technology, Inc.; Nachi Europe GMBH; NSK Europe Ltd.; Schaeffler Technologies GMBH & Co. KG; FAG Kugelfisher GMBH; AB SKF, SKF GMBH; NTN Walzlager GMBH; NTN-SNR Roulements SA

News: Antitrust MichiganNews