Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Three polyurethane foam manufacturers plead guilty to price fixing, (Jun 30, 2014)

By Linda O’Brien, J.D., LL.M.

Three manufacturers of polyurethane foam used to create interior components for automobiles pleaded guilty to participating in a scheme to fix prices to customers, the Department of Justice (DOJ) announced on June 27. The one-count felony charge was filed in the U.S. District Court for the Eastern District of New York in Brooklyn against Riverside Seat Company, Woodbridge Foam Fabricating Inc. and SW Foam LLC.

According to court documents, the companies conspired with others to fix prices for polyurethane flexible slab stock automotive foam in the U.S. and elsewhere from at least as early as June 9, 2008 until at least April 20, 2009. The companies have agreed to pay a total of $6,148,800 in criminal fines and to cooperate with the department’s ongoing investigation.

Riverside Seat, Woodbridge, and SW Foam manufactured polyurethane flexible slab stock automotive foam—a low-density, slab stock, flexible foam used as a component of automotive interior parts, including seats, headliners, headrests, door panels, and armrests. Polyurethane flexible slab stock automotive foam includes only the foam itself and does not include any automotive parts in which such foam may be a component.

According to the charge, the companies and their co-conspirators discussed polyurethane foam prices and agreed to coordinate the timing and amount of price increases to customers. The companies carried out the agreement and exchanged information for the purpose of monitoring and enforcing adherence to the agreement.

The three manufacturers are charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

“Today’s charges demonstrate the Antitrust Division’s commitment to holding companies accountable for conspiracies that affect components used in products that consumers rely on every day,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously prosecute companies that engage in price-fixing schemes that subvert normal competitive processes and defraud American consumers and businesses.”

News: Antitrust AntitrustDivisionNews