September 20, 2013
Yesterday the United States Department of Justice (DoJ) announced that two executives of Fujikura Ltd. have been indicted for their roles in the ongoing global auto parts price-fixing investigation. In this case, the indictments relate to allegations that the two executives participated in a conspiracy to fix the prices of automotive wire harnesses sold to Subara for installation in US and other cars.
According to the DoJ, the two executives attended meetings in Japan to fix prices, rig bids and divide the market for the supply of wire harnesses sold to Subaru (and engaged in further communications to monitor and enforce cartel agreements). Also according to the DoJ tally, 11 companies and 18 executives have been charged to date in the U.S. in the auto parts case, more than USD $874 million in fines have been imposed and 14 individuals have been sentenced to pay criminal fines and serve prison sentences.
In Canada, this investigation has included the Competition Bureau achieving record criminal bid-rigging fines under section 47 of the Competition Act. In this regard, last April the Bureau announced that two Japanese motor vehicle component suppliers had been fined $5 million and $30 million by the Ontario Superior Court for participating in a bid-rigging conspiracy relating to the supply of parts to Honda and Toyota over a ten-year period (see: $5M Fine for a Japanese Supplier of Motor Vehicle Components and Record $30M Fine Obtained by Competition Bureau Against Japanese Auto Parts Supplier). The Bureau relied on its Immunity and Leniency Programs in investigating this case, with the two companies fined receiving discounted fines for cooperating with the Bureau in its ongoing investigation.
In Canada, the conspiracy offences of the Competition Act (under section 45) prohibit agreements between competitors (or potential competitors) to fix prices, divide markets or restrict output (with potential penalties of up to $25 million, imprisonment for up to 14 years, or both).
Under the bid-rigging offences of the Competition Act (section 47), it is a criminal offence to agree to not submit a bid or tender; agree to withdraw a bid or tender already submitted; or submit a bid or tender that is arrived at by agreement. Penalties for violation of the bid-rigging offences include unlimited fines (i.e., in the discretion of the court), imprisonment for up to 14 years, or both.
Competition law risk can be significantly reduced through a credible and effective competition law compliance program.
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