Car parts manufacturer Mitsubishi hit with $13M fine as part of bid-rigging conspiracy

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Car parts manufacturer Mitsubishi Electric has been hit with a $13.4-million fine for its part in what Canada’s Competition Bureau called an international bid-rigging conspiracy within the automotive industry.

The fine was handed down by an Ottawa judge Tuesday after the company admitted that sales management personnel and others held covert meetings in Japan with representatives of a rival company, Denso, to determine who would win bids to supply alternators to Honda and Ford and ignition coils to GM between 2003 and 2006.

Cars containing the alternators and ignition coils were manufactured and sold in Canada, according to the Competition Bureau. Honda, Ford and GM were all unaware of the meetings between Mitsubishi and Denso.

It is the latest conviction as part of an ongoing crackdown by Canada’s Competition Bureau on bid-rigging in the car parts industry and brings the total amount of fines levelled against Japanese companies to $84 million over the past four years. The single largest fine was $30 million given to Yazaki Corp. in April 2013 for rigging bids on wire harnesses for 2005 and 2006 Honda Ridgeline and Civic models and 2006 Toyota Corolla and Matrix models.

The investigation began in 2009 after a tip to the Competition Bureau’s immunity program. The program provides immunity to the first party to disclose an offence or provide evidence leading to the laying of charges.

According to an agreed statement of facts and sentencing submissions, the total volume of commerce related to Mitsubishi’s sales to Honda, Ford and GM was $140.6 million. The Competition Bureau said the exact amount of the increase in price that Honda, Ford or GM may have had to pay is difficult to determine, according to sentencing submissions. The company also could have benefitted from an increase of market share in their industry.

Mitsubishi voluntarily agreed to cooperate with the Competition Bureau’s leniency program, agreeing to admit guilt in exchange for a lower fine. Mitsubishi also agreed to launch a corporate compliance program.

Typically the starting point for a fine is considered to be 20 per cent of the total volume of commerce generated by the offender. The amount of the fine can be adjusted upward or downward depending on the severity and number of aggravating circumstances, or the level or timeliness of cooperation the offender provides.

Mitsubishi’s Canadian fine pales in comparison to the $190-million fine it received in the United States for the same conduct it pleaded guilty to in Ottawa court.

There have been nine other convictions related to bid-rigging in the automotive industry:

  • On April 1, 2016, Showa Corp. pleaded guilty and received a $13-million fine for rigging bids on electric power steering gears in Honda cars
  • On Dec. 9, 2015, Toyo Tire & Rubber Co. pleaded guilty to three counts of bid-rigging and received a $1.7-million fine for anti-vibration components for Toyota vehicles
  • On Dec. 11, 2014, Yamashita Rubber Co. pleaded guilty and received a fine of $4.5 million for rigging bids on anti-vibration components on Honda cars
  • On Aug. 20, 2014, Denso Corp. received a $2.45-million fine after pleading guilty to rigging bids in relation to electric control units in Lexus RXs and Toyota Corollas between 2003 and 2008
  • On Feb. 20, 2014, Panasonic Corp. was fined $4.7 million for bid-rigging on switches and sensors in Toyota vehicles
  • On Jan. 30, 2014 NSK Ltd. pleaded guilty to two counts of rigging bids on wheel hub bearing units for Toyota vehicles and was fined $4.5 million
  • On July 12, 2013, JTEKT Corp. was fined $5 million for rigging bids on wheel hub bearing units for Toyota
  • On April 18, 2013, Yazaki Corp. received a $30-million fine for bid-rigging on wire harnesses

aseymour@postmedia.com

Twitter.com/andrew_seymour

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