$5M Fine for a Japanese Supplier of Motor Vehicle Components

As part of an ongoing investigation by the Canada’s Competition Bureau, Furukawa Electric Co., Ltd. (Furukawa), a Japanese supplier of motor vehicle components, was fined $5 million by the Ontario Superior Court of Justice for its participation in an international bid-rigging conspiracy.

This fine is the largest ever ordered by a court in Canada for a bid-rigging offence under the Competition Act.

The evidence shows, according to the Competition Bureau, that Furukawa secretly conspired with other Japanese motor vehicle components manufacturers to submit bids or tenders in response to requests for quotations to supply Honda of Canada Manufacturing Inc. (Honda) with certain motor vehicle components.

“Cracking down on cartels, including bid-rigging offences, is a top priority for the Bureau,” said John Pecman, Interim Commissioner of Competition. “This criminal activity defrauded the automobile sector in Canada and the substantial fine demonstrates the seriousness of such an offence.”

2006 Honda CivicFurukawa’s plea relates to electrical boxes, including fuse boxes, relay boxes and junction blocks, sold to Honda between 2000 and 2010 for the Honda Civic. The total volume of commerce in Canada affected by the bid-rigging conspiracy was approximately $41 million.

Since 2000, Honda has produced over 2.2 million Honda Civics in Canada. The Civic has been Canada’s best-selling passenger car for 15 consecutive years.

The Bureau said its investigation only relates to motor vehicle components manufacturers. There is no allegation of wrongdoing against motor vehicle manufacturers, such as Honda, or the customers of the companies under investigation.

The Bureau became aware of the motor vehicle components cartel by way of its Immunity Program. The investigation also benefited from the cooperation of numerous companies under the Bureau’s Leniency Program.

Furukawa participated in the Bureau’s Leniency Program and provided substantial assistance to the Bureau and the Public Prosecution Service of Canada. The company’s cooperation has saved considerable costs associated with the investigation and prosecution.

The Bureau’s ongoing investigation into the motor vehicle components industry is its largest to date with respect to bid-rigging, and is being coordinated with a number of other jurisdictions, including the United States, Japan, the European Community and Australia.

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.