DOJ Announces $200M Fine, Prison for Japan Auto Parts Supplier Price-Fixing
On September 29, 2011, the Justice Department announced that Furukawa Electric Co. Ltd., a Japanese supplier of automotive wire harnesses and related products, has agreed to plead guilty and pay a $200 million fine for its role in a price-fixing and bid-rigging conspiracy in the sale of parts to automobile manufacturers. Three Japanese national executives have also agreed to plead guilty and to serve prison time in the U.S.
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(Automotive wire harnesses are automotive electrical distribution systems used to direct and control electronic components, wiring and circuit boards in cars.)
Conspired to Rig Bids & Fix Prices of Auto Wire Harnesses for 6-10 Years
According to four separate one-count felony charges filed in U.S. District Court for the Eastern District of Michigan in Detroit, Furukawa Electric Co. and its executives -- Junichi Funo, Hirotsugu Nagata and Tetsuya Ukai -- engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of automotive wire harnesses and related products sold to customers in the U.S. and elsewhere.
The Justice Department states that Furukawa Electric Co. participated in the conspiracy from at least as early as January 2000, until at least January 2010. Funo, Nagata and Ukai participated in the conspiracy at various times from at least as early as April 2003, until at least July 2009. During at least part of the conspiracy period, Funo and Nagata were employed and engaged in price fixing in the Detroit area.
Company to Pay $200M, Executives to Serve 1 to 1½ Year Prison Terms
According to the plea agreements, Furukawa Electric Co. will pay a $200 million fine, and the three executives will serve prison time in the U.S. ranging from one year to 18 months.
First Charges in Ongoing Investigation into Price Fixing in Auto Parts Industry
According to Justice, the charges are the first to arise from an ongoing federal antitrust investigation into bid rigging, price fixing and other anticompetitive conduct in the automotive parts industry.
(See ITT’s Online Archives 11083105 for summary of a similar guilty plea by a California auto lights distributor for a Taiwanese producer.)