Another motor vehicle cartel reaches the end of the road!
Over the last few years, the European Commission has put more resources into uncovering “the supreme evil of antitrust” – cartels. This month, the Commission fined five undertakings for participating in up to four cartels for the supply of car seatbelts and airbags. All five Japanese suppliers settled with the Commission, in return for a reduced fine, for their role in the cartels which targeted European car manufacturers.
The Commission held that between 2004 and 2008, the five Japanese companies (Tokai Rika, Takata, Autoliv, Toyoda Gosei and Marutaka) had been involved in up to four separate cartels for the sale of seatbelts and airbags to car manufacturers including Toyota, Suzuki and Honda. The cartels involved coordinating prices and/or markets and exchanging commercially sensitive information. All of the conduct took place in Japan or via e-mail between the companies; however involved the manufacture and sale of cars within the European Economic Area (EEA) and therefore fell within the scope of the Commission’s powers.
The Commission held that the cartels had a significant impact on European car manufacturers as one out of eleven cars sold in Europe is produced by a Japanese company.
The Commission became aware of the conduct when Takata and Tokai Rika applied for full immunity for their role in the cartels (and together avoided fines of up to €89 million!).
The Legal Framework
Cartels are considered one of the most serious competition law infringements and are prohibited under both European and UK competition law. This decision marks another success for the Commission after major investigations into cartel behaviour in the motor industry. The Commission has now fined cartelists in the motor industry over €1.6 billion, through their investigations.
The Commission have also recently been promoting the simplified settlement procedure, which offers immunity (for the first applicant who reports a cartel) and reduced fines (for all other parties) in return for information and evidence that leads to infringement decisions against cartel participants.
The present case is the Commission’s 25th settlement since the introduction of the simplified cartel procedure, introduced in 2008, which reduces fines for parties by 10% and offers a quicker process.
Tokai Rika received 100% immunity under the Leniency Notice and therefore was not fined for their participation in one of the cartels, however was fined €1,818,000 for its role in another cartel. All of the other companies were fined, with some receiving reduced fines under the Leniency Notice (as much as 50%) and a further 10% reduction in fine for settling with the Commission and using the simplified procedure.
Autoliv were fined €8,051,000, Takata were fined €12,724,000, Toyoda Gosei were fined €11,262,000 and Marutaka were fined €156,000.
Lesson to be learned – although the leniency and settlement procedures offer reductions (and sometimes immunity) from fines, companies can still be left with very large fines for cartel conduct. The Commission will continue to focus on cartel conduct that impacts on the EEA – hoping that the offer of immunity from fines for the first undertaking to reveal the existence of a cartel will be an incentive for organisations to cease cartel conduct and inform the Commission.
This article was co-written by Rebecca Ferguson (email@example.com)