Hepler Broom, LLC

Attention Auto-Parts Industry: No End in Sight for Price-Fixing Prosecutions

February 5, 2013

If you are involved in the auto parts industry there is good reason to be concerned.  Why?  Read on.

On October 31, 2012 The Department of Justice-Antitrust Division announced the ninth guilty plea for price-fixing and bid-rigging in a continuing investigation of industry practices.  The DOJ investigation reveals a long-standing conspiracy from approximately 2003 to 2010, when the first prosecutions were announced.   Thus far, nine companies and eleven executives have pled guilty in prosecutions brought in the U.S. District Court for the Eastern District of Michigan, in Detroit.  A tenth company has agreed to plead guilty and awaits arraignment and sentencing.

The latest plea involves Tokai Rika Co., Ltd. and its U.S. subsidiary, which will pay a $17.7 million criminal fine for its involvement in in fixing prices for automotive heater control panels installed in cars in the United States and overseas.  The company also pled guilty to obstruction of justice charges.  In February 2010 the company became aware of an FBI search warrant on its U.S. subsidiary.  An executive then directed employees to delete electronic data and destroy documents in a failed attempt to cover up evidence.

Since its inception, the auto parts industry investigation has ensnared firms in the U.S., Japan, and Germany resulting in criminal fines in excess of $790 million.  The investigation is ongoing and additional indictments against companies and individuals are expected.

If you are in the auto parts industry, what should you do?

  • Familiarize yourself with the players involved in the scheme and assess any business relationships you may have had with them—both the companies and the individuals.
  • Conduct an internal check on any transactions regarding the types of parts involved thus far.  There have been a number of types of parts, some of which may be in your product offerings.
  •  Assess whether there is a basis to go offense—and seek recovery from the conspirators if their actions have injured you in the competitive process.
  • Consider implementing or updating your antitrust compliance program to educate your key personnel about the risks involved and how to avoid exposure.
  •  Get help from legal counsel familiar with antitrust investigations.  If you need assistance, our extensive experience in this field can help.

COVID-19 Updates

HeplerBroom is pleased to announce that its physical offices have reopened. While the health and safety of our clients, employees, and families, remain our top priority, HeplerBroom attorneys and staff are returning to our offices on full-time or modified schedules. Our offices are open to visitors and clients with scheduled appointments, with appropriate screening of visitors and social-distancing protocols. HeplerBroom will continue to follow CDC recommendations for cleaning and sanitizing.

We are very proud of the dedicated efforts of our attorneys and staff to provide great service and work product to our clients during the pandemic. This would not have been possible without the incredible support provided by the HeplerBroom IT Department and other essential personnel who supported our personnel and clients from the office locations while the rest of our teams worked remotely.

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