Japanese manufacturer fined a record $46 million for car parts cartel


May 16, 2018 15:00:17

The giant Japanese electrical component maker Yazaki Corporation has been fined a record Australian fine of $46 million for price fixing and engaging in running a cartel in parts supplies.

The landmark decision vindicates the Australian Competition and Consumer Commission’s (ACCC) call to appeal against the original $9.5 million fine handed down by the Federal Court last year.

Yazaki is one of the largest component makers for the global automotive industry specialising in electrical cables, meters and dashboard instruments.

The ACCC alleged Yazaki and its local subsidiary, Australian Arrow, engaged in cartel conduct and price fixing in the supply of wire harnesses used in the manufacture of Toyota’s Camry models between 2003 and 2009.

Wire harnesses are electrical systems for distributing power and electrical signals to various components of a car.

“We appealed the penalties imposed by the trial judge because we considered that the original penalties of $9.5 million were insufficient to adequately deter Yazaki or other businesses from engaging in cartel conduct in the future,” ACCC Chairman Rod Sims said.

In its appeal, the ACCC argued a total penalty of between $42 million and $55 million would be an appropriate deterrent, taking into account the serious nature of Yazaki’s actions and the size of their global operations.

“Cartel conduct is illegal because it not only cheats consumers and other businesses, it also restricts healthy economic growth,” Mr Sims said.

“The ACCC is continuing to seek penalties which are high enough to deter anti-competitive conduct, particularly by large national and multinational corporations.”

While it is a step in the right direction for the ACCC in its efforts to stamp out price-fixing and cartels, the result still supports a recent OECD finding that average and maximum penalties imposed by Australian courts for breaches of the cartel laws are significantly lower than in other developed economies.

In 2012, Yazuki was fined $630 million and had four senior executives jailed for between 15 month and two years for running a similar cartel in the US.





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