Four years ago FBI agents conducted raids on the Detroit area offices of Denso Corp, Yazaki North America and Tokai Rika as part of its investigation into alleged bid-rigging and price-fixing. All three companies have subsequently pled guilty.
In total, criminal antitrust charges have been filed against 34 individuals, and 27 auto parts companies have pleaded guilty or agreed to do so in what is being called the Justice Department’s largest-ever antitrust case.
The alleged collusion has cost U.S. consumers untold millions of dollars in higher new vehicle prices, and last September Attorney General Eric Holder vowed that federal investigators would “check under every hood and kick every tire” in their efforts to bring the guilty parties to justice.
In a recent interview, antitrust division deputy assistant attorney general Brent Snyder said, “It’s a very, very safe assumption that U.S. consumers paid more, and sometimes significantly more, for their automobiles as a result of this conspiracy.”
According to the Justice Department, 27 auto parts companies have agreed to pay fines totaling $2.3 billion and the investigation appears to be far from over. Last Thursday new charges were brought against a Japanese auto parts executive who allegedly conspired to fix the price of heater control panels used in Toyota vehicles, and with instructing workers to destroy evidence relevant to the investigation.
Authorities in a number of other countries, including Australia and Japan have cooperated with U.S. investigators in their prosecutions of foreign national, many of whom have pleaded guilty in order to avoid lengthy legal battles.
Some experts say the automotive industry is especially susceptible to collusion because of the limited number of parts suppliers and purchasers and the fact that auto parts are relatively standardized and interchangeable between various models.
Director of the Institute for Antitrust Consumer Studies at the Loyola University Chicago law school Spencer Weber says, “The firms will just make more money if they’re able to reach and stick to an agreement to collectively charge higher prices so that customers can’t get them to bid against each other. The problem is, of course, it’s a felony in the United States.”