February 20, 2014
In what can only be called a sobering reminder earlier today of the importance of not obstructing an ongoing criminal antitrust investigation, the U.S. Department of Justice announced that a former auto parts supplier executive has agreed to plead guilty for obstructing the U.S. authorities’ ongoing auto parts cartel investigation and serve jail time.
According to the DoJ, the former executive of Japan-based Denso Corporation has agreed to plead guilty to obstruction and serve a year and a day in U.S. prison for deleting e-mails and electronic documents in early 2010 after learning the FBI had executed a search warrant on Denso’s U.S. subsidiary. (In March, 2012, Denso pleaded guilty and was sentenced to pay a USD $78 million criminal fine for its role in conspiracies to fix the prices of heater control panels and electronic control units supplied to Toyota.)
As in the U.S., obstructing a competition law investigation in Canada can lead to rather serious consequences. In this respect, the Competition Act includes obstruction provisions, which make it criminal offences to impede or prevent an inquiry or examination under the Competition Act, fail to comply with section 11 production orders or search warrants or destroy or alter records sought by the Bureau. The potential penalties for violation of these offences include unlimited fines (i.e., in the discretion of the court) or imprisonment.
To reduce the likelihood of obstruction issues from arising during a competition law related investigation, search and seizure guidelines (often included in competition law compliance programs) commonly include guidelines that stipulate not to destroy or remove documents from premises, not to delete e-mails, not to break investigator seals and to suspend the operation of document retention programs.
Also today, the Competition Bureau on this side of the border announced that Panasonic Corporation had pleaded guilty to two counts of bid-rigging under the Competition Act, for conspiring with a second Japanese auto parts manufacturer to coordinate bids for auto parts sold to Toyota, and has been fined $4.7 million by the Ontario Superior Court of Justice.
In reading these two most recent auto parts cartel related developments, in what has become something of a marathon investigation, I have begun to wonder whether any parts in some of the leading auto manufacturers’ products have not been price-fixed (and indeed what the competitive price for some car models may actually be).
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