Japanese Auto Parts Maker to Plead Guilty to Price Fixing, Obstructing Justice

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Japan-based auto parts maker Tokai Rika Co. Ltd., has agreed to plead guilty and to pay a $17.7 million criminal fine for its role in a conspiracy to fix prices of heater control panels (HCPs) installed in cars sold in the United States and elsewhere, the Department of Justice announced on October 30. HCPs are located in the center console of an automobile and control the temperature of the interior environment of a vehicle.

Tokai Rika has also agreed to plead guilty to a charge of obstruction of justice related to the investigation of the antitrust violation. A two-count felony charge was filed in the federal district court in Detroit.

Including Tokai Rika, nine companies and 11 executives have pleaded guilty or agreed to plead guilty in the Justice Department’s ongoing investigation into price fixing and bid rigging in the auto parts industry, according to the announcement.

Tokai Rika and its co-conspirators carried out the conspiracy from at least as early as September 2003 until at least February 2010, the government alleged. The company admitted to fixing prices of HCPs sold to Toyota in the United States and elsewhere, on a model-by-model basis.

The company also admitted to obstructing the government’s investigation. After learning that the FBI had executed a search warrant on Tokai Rika’s U.S. subsidiary, a company executive directed employees to delete electronic data and destroy paper documents likely to contain evidence of antitrust crimes in the United States and elsewhere, according to the Justice Department.

“The conspirators used code names and chose meeting places and times to avoid detection,” said Scott D. Hammond, Deputy Assistant Attorney General in charge of the Department of Justice Antitrust Division’s criminal enforcement program. “They knew their actions would harm American consumers, and attempted to cover it up when caught. The division will continue to hold accountable companies who engage in anticompetitive conduct and who obstruct law enforcement.”