South Korea, supporting a global police action against auto-parts price fixing, has hit Japanese and German suppliers with a string of fines in recent weeks.
The latest penalties came Tuesday, when Germany’s Schaeffler AG and Japan’s JTEKT Corp. were fined for rigging bids on tapered roller bearings to Hyundai Motor Co., Kia Motors Corp. and Hyundai Powertech.
That crackdown followed last month’s action against five other suppliers, including Japan’s Denso Corp. and NGK Spark Plug Co., for fixing prices on engine components to Hyundai and Kia.
In the bearings case, South Korea’s Fair Trade Commission said Schaeffler and JTEKT conspired to split the market evenly between them and exchanged pricing strategies ahead of submitting their annual price-cut proposals to their customers. The collusion occurred from 2001 to 2008, it said.
South Korea’s sweep adds pressure on global auto parts makers, and especially Japanese suppliers, who have become the focal point of a worldwide investigation into bid rigging.
The U.S. Department of Justice has largely spearheaded the push, which has snowballed into the U.S.’s biggest-ever antitrust crackdown, with criminal fines soaring to nearly $2.5 billion. In the U.S. alone, 34 companies and 29 executives have pleaded guilty or agreed to plead guilty, with many individuals being sent to prison.
The European Union, Japan, China, Singapore and South Africa also have taken action.
In Korea, Schaeffler and JTEKT were able to achieve profit margins 40 percent higher than average for their price-fixed auto bearings, Korea’s FTC said in a release.
“The undertakings exchanged their price plans whenever a price change was expected and continued reaffirming that they have no intention of engaging in a competition against one another, thereby increasing their selling prices or minimizing the fall in prices,” it said.
Schaeffler’s local unit, Schaeffler Korea, was fined 5.5 billion won ($5.1 million), while JTEKT was tagged with a $1.8 million penalty.
In the U.S., by contrast, fines typically stretch into the tens of millions of dollars. Yazaki Corp., a maker of wire harnesses, was fined a whopping $470 million.
South Korea’s action against five auto parts makers last month resulted in a total of $3.2 million in fines for their collusion in the engine components sold to Hyundai and Kia from 2008 to 2011, Reuters reported. Besides Denso, a member of the Toyota Group of suppliers, and NGK Spark Plug, the group included Korean supplier Yura Tech, which makes ignition technologies.