Unprecedented cooperation with US antitrust enforcement authority leads to major cartel crackdown
20 Jul, 2016, 16:20 ET
Japanese company to plead guilty and pay US$130M fine for its participation in a bid-rigging scheme
OTTAWA, July 20, 2016 /CNW/ - Nishikawa Rubber Co., Ltd. (Nishikawa), a Japanese manufacturer of automotive parts, was charged in the United States (US), and has agreed to plead guilty and pay a fine of US$130 million, for its participation in an international bid-rigging conspiracy affecting Canada and the United States.
This unprecedented resolution is the result of a high degree of collaboration between the Competition Bureau and the Antitrust Division of the United States Department of Justice.
Between January 2000 and September 2012, Nishikawa engaged in secret illegal arrangements with other suppliers of body sealing products (BSP). The BSPs were sold to car makers in the US for cars manufactured there, and cars manufactured in Canada by Toyota and Honda that were then sent to the US for sale.
After discussions between the agencies, it was agreed that the matter would be addressed by the Antitrust Division as the conduct primarily targeted US consumers. This close collaboration is consistent with the agreement between the US and Canada on best practices on cooperation in the application and enforcement of competition laws. The coordination led to efficient and effective investigations and an appropriate remedy. Subject to imposition by the US courts, this substantial fine on Nishikawa effectively addresses the adverse effects of its conduct in Canada, as well as in the US.
- The conduct engaged in by Nishikawa affected sales in the US and elsewhere. Approximately US$236 million related to sales of BSPs in Canada. The BSPs sold in Canada were incorporated into automobiles assembled in Canada. A significant percentage of these vehicles were then exported to the US.
- The Antitrust Division included the US$236 million in sales that were made to Toyota and Honda in Canada in its assessment of the proposed fine.
- BSPs are installed into automobiles to keep the interior dry from rain and free from wind and exterior noises. They consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids, and other smaller seals. The investigation continues.
- The Bureau's investigation relating to a series of alleged conspiracies and bid-rigging agreements among various suppliers in the sale and supply of motor vehicles components in Canada and elsewhere has led to nine guilty pleas in Canada and over CAN$70 million in fines imposed by the courts in Canada.
- Cracking down on cartels is a top enforcement priority for the Bureau and we will continue to vigorously pursue those who participate in cartel activities.
"Strong cooperation among law enforcers is crucial to detect and deter cartel activities that span beyond our borders. We achieved great results through cooperation with our US partners in this international investigation into bid-rigging in the auto parts industry. The Bureau continues to work closely with partners, in the US and elsewhere, to crack down on cartels."
Senior Deputy Commissioner, Cartels and Deceptive Marketing Practices Branch
"Today's resolution is only the most recent and visible example of cooperation that routinely occurs between the Competition Bureau and U.S. Department of Justice. We greatly appreciate and value the working relationship our two agencies have developed over many years of pursuing a shared mission to protect competition in our markets and the consumers who benefit from it."
Deputy Assistant Attorney General, Justice Department's Antitrust Division
- Backgrounder: Overview of the automobile component bid-rigging conspiracy investigation
- Agreement between the Government of Canada and the Government of the United States of America on the Application of Positive Comity Principles to the Enforcement of their Competition Laws
- Immunity Program
- Leniency Program
- Videos on cartels and bid-rigging
- On July 19, 2016, the Antitrust Division published a release regarding Nishikawa's agreement to plead guilty.
- On April 1, 2016, Showa Corporation was fined $13 million for rigging bids for electric power steering gears.
- On December 9, 2015, Toyo Tire was fined $1.7 million for rigging bids for anti‑vibration components.
- On December 11, 2014, Yamashita Rubber Co. was fined $4.5 million for rigging bids for anti-vibration components and systems.
- On August 20, 2014, DENSO Corporation was fined $2.45 million for rigging bids for body electronic control units.
- On February 20, 2014, Panasonic Corporation was fined $4.7 million for rigging bids for certain types of switches and sensors.
- On January 30, 2014, NSK Ltd. was fined $4.5 million for rigging bids for automotive wheel hub unit bearings.
- On July 12, 2013, JTEKT Corporation was fined $5 million for rigging bids for automotive wheel hub unit bearings.
- On April 18, 2013, Yazaki Corporation was fined $30 million for rigging bids for wire harnesses.
- On April 4, 2013, Furukawa Electric Co., Ltd. was fined $5 million for rigging bids for electrical boxes.
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
SOURCE Competition Bureau
For further information: For media enquiries, please contact: Media Relations, Telephone: 819-994-5945, Email: [email protected]; For general enquiries, please contact: Information Centre, Competition Bureau, Telephone: 819-997-4282, Toll free: 1-800-348-5358, TTY (hearing impaired): 1-800-642-3844
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