Antitrust Law Daily Wrap Up, TOP STORY: Hitachi Chemical agrees to plead guilty to fixing electrolytic capacitor prices, (Apr 27, 2016)

By Jeffrey May, J.D.

The Department of Justice has charged Hitachi Chemical Co. Ltd. with conspiring to fix prices for electrolytic capacitors. A one-count felony charge was filed today in the federal district court in San Francisco. Japan-based Hitachi Chemical, which has agreed to plead guilty to the charge, is the second company named in the government's ongoing antitrust investigation into anticompetitive conduct in the capacitor industry (U.S. v. Hitachi Chemical Co. Ltd., Case No. CR 16 180).

According to the one-count information, the conspiracy to fix prices and rig bids for capacitors, a fundamental component of electronic circuits, lasted from approximately 1997 until 2014. Hitachi Chemical allegedly participated in that conspiracy with competitors between 2002 and 2010.

Electrolytic capacitors, including aluminum and tantalum types, are a major sub-type of capacitors. These capacitors store and regulate electrical current in electronic products, including computers, televisions, car engine and airbag systems, home appliances, and office equipment.

NEC Tokin Corporation was the first company to plead guilty to a charge for its role in the conspiracy. It agreed to pay a $13.8 million criminal fine in September 2015. An industry executive also has been indicted for his role in the conspiracy. The indictment—naming Takuro Isawa, a Japanese citizen and a global sales general manager for an unnamed Japanese electrolytic capacitor manufacturer—was unsealed in January.

Terms of Hitachi Chemical's plea agreement, which will be subject to court approval, have not yet been disclosed. In addition to pleading guilty to that charge and paying a criminal fine, Hitachi Chemical has agreed to cooperate in the government’s ongoing investigation.

Worldwide investigation. Last month, the Japan Fair Trade Commission (JFTC) reported that it had issued cease and desist orders and surcharge payment orders totaling more than 6,697,960,000 Yen against seven capacitor manufacturers capacitors for violations of Japan's Antimonopoly Act. At that time, Hitachi Chemical announced that the JFTC had granted it leniency in its investigation. As a result, the JFTC did not impose a cease-and-desist or surcharge payment order on the company. In the company’s statement, Hitachi Chemical apologized for the conduct.

The European Commission (EC) also is investigating manufacturers of electrolytic capacitors for cartel conduct. The EC’s investigation began in March 2014. A statement of objections was issued to ten manufacturers in November 2015. In addition, China’s regulatory authorities were reported to have conducted a cartel investigation. Hitachi Chemical, NEC Tokin, and other industry participants have also been named in a number of private suits filed in the United States.

Companies: Hitachi Chemical Co. Ltd.; NEC Tokin Corp.

MainStory: TopStory Antitrust AntitrustDivisionNews