Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Two Automobile Parts Executives Agree to Plead Guilty to Bid Rigging, Price Fixing Charges, (May 22, 2013)
Organizations Mentioned:Autoliv, Inc. | DENSO Corp. | Furukawa Electric Co., Ltd. | TRW Deutschland Holding GmbH | Toyota Motor Corp.
By Tobias J. Gillett, J.D., LL.M.
Two executives for an automotive parts company have agreed to plead guilty to U.S. Department of Justice charges that they participated in a conspiracy to fix prices and rig bids for automobile parts sold to Toyota Motor Corporation and Toyota Motor Engineering and Manufacturing North America Inc., the Department of Justice announced yesterday (U.S. v. Suzuki, Case 2:13-cr-20382-DPH-DRG; U.S. v. Watanabe, Case 2:13-cr-20381-PDB-MKM).
According to a two-count felony charge filed by the Department of Justice in the federal district court in Detroit, Yuji Suzuki, a Japanese national and a senior manager in DENSO Corporation’s Toyota Sales Division, conspired to rig bids and fix prices for electronic control panels and heater control panels sold to Toyota. His participation in the two alleged conspiracies lasted from the summer of 2005 until at least December 2008.
A one-count felony charge filed in the same court against Hiroshi Watanabe, also a Japanese national and a group leader in DENSO’s Toyota Sales Division, asserts that he conspired to rig bids and fix prices for heater control panels sold to Toyota. His participation allegedly lasted from around June 2008 until at least February 2010.
“The conspirators reached agreements to fix prices and allocate bids, and took measures such as using code names and meeting in secret to cover their tracks,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division's criminal enforcement program. “Cracking down on international price-fixing cartels that target U.S. businesses and consumers has been, and will continue to be, among the top priorities for the Antitrust Division.”
The two executives allegedly carried out their respective roles in the conspiracies by participating, or directing the participation of subordinate employees, in meetings or conversations concerning the coordination and fixing of prices for the automobile parts. According to the charges, Toyota supplied its needs for electronic control panels and heater control panels by sending out Requests for Quotation (RFQs) to automotive parts suppliers, which would respond to the RFQs by submitting bids for the work. DENSO and other suppliers allegedly colluded on the bids they submitted to Toyota.
Electronic control panels are electronic components of automobiles that control various electrical systems, such as power windows or power locks. Heater control panels are located in an automobile’s center console and control the temperature in the vehicle.
Under the agreements announced yesterday, Suzuki will serve 16 months in a U.S. prison and pay a $20,000 criminal fine, while Watanabe will serve 15 months in a U.S. prison and pay a $20,000 criminal fine. Both executives have agreed to cooperate with the Department of Justice’s ongoing investigation.
“Those individuals who engage in price fixing and bid rigging negatively impact the automotive industry by causing vehicle buyers and makers to pay higher prices,” said Robert D. Foley III, Special Agent in Charge of the FBI’s Detroit Division. “The FBI is committed to pursuing and prosecuting these criminals.”
DENSO pled guilty in March 2012 to charges relating to its participation in the rig bidding and price fixing conspiracies, and was sentenced to pay a $78 million fine. Over the course of the Justice Department’s ongoing investigation into anticompetitive conduct in the automotive parts industry, nine companies and 14 executives have pled guilty or agreed to plead guilty. This tally includes a total of more than $809 million in criminal fines paid by DENSO, Nippon Seiki Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd., Yazaki Corp., G.S. Electech Inc., Fujikara Ltd., Autoliv Inc., and TRW Deutschland Holding GmbH, as well as criminal fines and prison sentences of a year and a day to two years paid and served by 12 individuals.
Companies: DENSO Corp.; Toyota Motor Corp.
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