Business Crimes Hotline

WASHINGTON, DC

Price-Fixing Conspiracy Investigation

On Sept. 26, the Department of Justice (DOJ) announced the latest round of enforcement action in its ongoing antitrust investigation into price-fixing of automotive parts. Specifically, the DOJ reached agreements with nine additional Japan-based companies and two additional individuals to enter guilty pleas to felony violations of the Sherman Act, as well as other related counts. In connection with the pleas, which remain subject to court approval, the companies have agreed to pay a combined $740 million in criminal fines. Four of the companies agreed to criminal penalties of more than $100 million, as follows: Hitachi Automotive Systems Ltd. ($195 million); Jtekt Corporation ($103.27 million); Mitsuba Corporation ($135 million); and Mitsubishi Electric Corporation (MELCO) ($190 million).

According to the DOJ, in addition to price fixing, the conspiracies perpetrated by the charged companies and individuals (along with co-conspirators, some of whom have not been charged) included collusive agreements for bid rigging and part-supply allocation to a wide range of automobile manufacturers, including Chrysler, Ford, General Motors, and the U.S. subsidiaries of the following: Honda, Mazda; Mitsubishi, Nissan, Toyota and Subaru. The conspiracies were carried out via meetings, conversations, and communications in both the U.S. and Japan. Additionally, the Government noted the conspirators' corresponding acts to conceal the conduct ' such as use of code names and remote locations. The scope of the conspiracies covered 30 different automotive parts, including alternators, ignition coils, and starter motors. In sum, the parts were sold for over $5 billion and affected 25 million purchased cars. In some instances, the conspiracies continued for more than a decade.

The two individuals charged in this round of enforcement action were Gary Walker and Tetsuya Kunida. Walker and Kunida are both former executives for the U.S subsidiaries of Japan-based suppliers. While Walker, a. U.S. citizen, was charged for his role in a conspiracy to fix the price of automotive seatbelts that spanned 2003 to February 2010, Tetsuya was charged in connection with a 2001-2012 anti-vibration rubber products conspiracy that affected suspension components and engine mounts.

In total, the Government's investigation to-date ' which has been conducted in cooperation with multiple international regulatory bodies ' has resulted in charges against 20 companies and 21 executives, resulting in combined criminal penalties in excess of $1.6 billion.

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WASHINGTON, DC

Price-Fixing Conspiracy Investigation

On Sept. 26, the Department of Justice (DOJ) announced the latest round of enforcement action in its ongoing antitrust investigation into price-fixing of automotive parts. Specifically, the DOJ reached agreements with nine additional Japan-based companies and two additional individuals to enter guilty pleas to felony violations of the Sherman Act, as well as other related counts. In connection with the pleas, which remain subject to court approval, the companies have agreed to pay a combined $740 million in criminal fines. Four of the companies agreed to criminal penalties of more than $100 million, as follows: Hitachi Automotive Systems Ltd. ($195 million); Jtekt Corporation ($103.27 million); Mitsuba Corporation ($135 million); and Mitsubishi Electric Corporation (MELCO) ($190 million).

According to the DOJ, in addition to price fixing, the conspiracies perpetrated by the charged companies and individuals (along with co-conspirators, some of whom have not been charged) included collusive agreements for bid rigging and part-supply allocation to a wide range of automobile manufacturers, including Chrysler, Ford, General Motors, and the U.S. subsidiaries of the following: Honda, Mazda; Mitsubishi, Nissan, Toyota and Subaru. The conspiracies were carried out via meetings, conversations, and communications in both the U.S. and Japan. Additionally, the Government noted the conspirators' corresponding acts to conceal the conduct ' such as use of code names and remote locations. The scope of the conspiracies covered 30 different automotive parts, including alternators, ignition coils, and starter motors. In sum, the parts were sold for over $5 billion and affected 25 million purchased cars. In some instances, the conspiracies continued for more than a decade.

The two individuals charged in this round of enforcement action were Gary Walker and Tetsuya Kunida. Walker and Kunida are both former executives for the U.S subsidiaries of Japan-based suppliers. While Walker, a. U.S. citizen, was charged for his role in a conspiracy to fix the price of automotive seatbelts that spanned 2003 to February 2010, Tetsuya was charged in connection with a 2001-2012 anti-vibration rubber products conspiracy that affected suspension components and engine mounts.

In total, the Government's investigation to-date ' which has been conducted in cooperation with multiple international regulatory bodies ' has resulted in charges against 20 companies and 21 executives, resulting in combined criminal penalties in excess of $1.6 billion.

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