Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Japanese auto parts supplier to pay $65.3 million for fixing prices, obstructing justice, (Sep 3, 2015)

By Jeffrey May, J.D.

The Department of Justice Antitrust Division’s auto parts investigation has taken a new turn. Today, the government announced its first case involving ceramic substrates for automotive catalytic converters. NGK Insulators Ltd. of Japan has agreed to plead guilty and to pay a $65.3 million criminal fine for its role in a price fixing and bid rigging conspiracy involving ceramic substrates and for obstructing justice (U.S. v. NGK Insulators Ltd., Case No. 2:15-cr-20550-BAF-APP).

According to a two-count charge filed in the federal district court in Detroit, NGK Insulators conspired to rig bids for, and fix prices of, ceramic substrates incorporated into catalytic converters from about July 2000 until about February 2010. The company—which sells a variety of ceramic and metallic products for the automotive industry, power generation, electronics components, and other industrial processes—is the second-largest worldwide manufacturer of ceramic substrates for automotive catalytic converters. It sold these parts directly and indirectly to auto makers, such as General Motors Company, Toyota Motor Corporation, and Nissan Motor Company.

Ceramic substrates are uncoated ceramic monoliths with a fine honeycomb structure that are used in automotive catalytic converters. Catalytic converters are critical emissions control devices that convert pollutants in an exhaust gas stream into less harmful gases through catalytic chemical reactions, the government explained.

The government also alleged that NGK obstructed justice. When the company first learned that the Federal Bureau of Investigation executed a search warrant on U.S. offices of an unnamed corporate co-conspirator regarding the auto parts conspiracies, NGK Insulator employees allegedly deleted electronic documents and destroyed paper files likely to contain relevant evidence in the United States. Later, when the company learned that it was under investigation by multiple law enforcement authorities, additional information was concealed or destroyed at the company's corporate headquarters in Japan, it was charged.

In addition to paying the $65.3 million criminal fine, NGK Insulators has agreed to cooperate in the Justice Department’s ongoing investigation. The plea agreement is subject to court approval.

The charges against NGK Insulators are the latest in the government’s antitrust investigation into the automotive parts industry, the Department of Justice announced. Including NGK Insulators, 36 companies and 30 executives have pleaded guilty or agreed to plead guilty in the probe and have agreed to pay more than $2.5 billion in criminal fines.

Companies: NGK Insulators Ltd.

News: Antitrust AntitrustDivisionNews