Antitrust Law Daily Wrap Up, TOP STORY: German auto parts supplier fined $57.8 million for price fixing, (Jun 23, 2015)

By Jeffrey May, J.D.

Robert Bosch GmbH pleaded guilty yesterday for its role in a bid rigging and price fixing conspiracy involving spark plugs, oxygen sensors, and starter motors sold to automobile and internal combustion engine manufacturers. The federal district court in Detroit accepted the company’s plea agreement, imposed the $57.8 million criminal fine recommended by the parties, and entered judgment in the matter (U.S. v. Robert Bosch GmbH, Criminal No. 5:15-cr-20197).

The Department of Justice Antitrust Division announced the charges against Bosch in March. A one-count felony charge was filed against the German-based company for violating Section 1 of the Sherman Act.

Bosch—the world's largest independent parts supplier to the automotive industry—admitted to participating in the conspiracy conduct involving spark plugs and oxygen sensors from about January 2000 until July 2011. Among Bosch's customers in this market were DaimlerChrysler AG, Ford Motor Company, General Motors Company, and Andreas Stihl AG & Co. Bosch also was charged with conspiring to allocate the supply of, rig bids for, and to fix the prices of, starter motors sold to Volkswagen AG and its subsidiaries in the United States from between January 2009 and June 2010.

Fine against Bosch. According to the government’s sentencing memorandum, Bosch’s substantial assistance in the auto parts investigation warranted a ten percent reduction on the fine. Under the U.S. Sentencing Guidelines, the fine range was $49.2 million to $98.5 million. Per the plea agreement, Bosch was given 15 days to pay the $57.8 million fine in full.

“Carve outs” for four individuals. Bosch’s plea agreement protects nearly all of the company’s employees from prosecution for their roles in the relevant conspiracy. The plea agreement notes, however, that four individuals were not shielded from prosecution. Generally, the Antitrust Division “carves out” employees or executives of a company that pleads guilty when it has a reason to believe that the individuals were involved in criminal wrongdoing and are potential targets of the government’s investigation. Since 2013, it has been Antitrust Division policy not to identify these carve-outs. Thus, the names of the individuals were filed under seal.

The government also has charged Japanese auto parts maker NGK Spark Plug Co. Ltd. for its role in the conspiracy involving spark plugs and standard oxygen sensors. NGK’s October 2014 plea agreement also included a “carve-out.” Last month, a current executive at NGK Spark Plug and one of the company's former high-level employees were indicted for their alleged roles in the conspiracy.

Attorneys: Kenneth W. Gaul for Department of Justice. Jeremy J. Calsyn (Cleary Gottlieb Steen & Hamilton LLP), Steven M. Kowal (K&L Gates LLP), and William R. Jansen (Warner Norcross & Judd LLP) for Robert Bosch GmbH.

Companies: Robert Bosch GmbH; NGK Spark Plug Co. Ltd.

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