Good morning. I’m joined today by Deputy Assistant Attorney General Scott Hammond, of the Antitrust Division’s criminal enforcement program, and Ron Hosko, Assistant Director of the FBI’s Criminal Division, to announce significant enforcement developments in the Justice Department’s efforts to crack down on price fixing and bid rigging in the automobile parts industry.
Today, we are announcing that nine Japan-based companies and two executives have agreed to plead guilty – and to pay a total of more than $740 million in criminal fines – for their roles in separate conspiracies to fix the prices of more than 30 different products sold to U.S. car manufacturers and installed in cars sold in the United States and elsewhere.
These international price-fixing conspiracies affected more than $5 billion in automobile parts sold to U.S. car manufacturers. In total, more than 25 million cars purchased by American consumers were affected by the illegal conduct.
This auto parts investigation is the largest criminal investigation the Antitrust Division has ever pursued, both in terms of its scope and the commerce affected by the alleged illegal conduct. Never before has the Department of Justice simultaneously announced the breakup of so many separate antitrust conspiracies. And today’s charges were filed in three different U.S. District Courts – in Detroit; in Cincinnati; and in Toledo, Ohio.
The conduct this investigation uncovered involved more than a dozen separate conspiracies aimed at the U.S. economy. Although these cartels operated totally independently, they all had one thing in common – they targeted U.S. manufacturing, U.S. businesses and U.S. consumers.
As a result of these conspiracies, Americans paid more for their cars. And American companies such as Chrysler, Ford and General Motors, as well as U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Subaru and Toyota – were victims of the illegal cartels.
During the course of this wide-ranging investigation, as we have uncovered each auto part conspiracy, we have continued to find more and more parts that are involved. And our work isn’t done. We will continue to check under every hood and kick every tire to make sure we put an end to this illegal and destructive conduct.
As demonstrated by this chart, seatbelts, radiators, windshield wipers, air conditioning systems, power window motors, power steering parts and a number of other products were affected by these conspiracies.
Generally speaking, here’s how they worked:
Company executives met face to face in the United States and Japan – and talked on the phone – to reach collusive agreements to rig bids, fix prices and allocate the supply of auto parts sold to U.S. car companies. In order to keep their illegal conduct secret, they used code names and met in remote locations. Then they followed up with each other regularly to make sure the collusive agreements were being adhered to.
The Antitrust Division and the FBI have worked closely with our international colleagues – including the Japan Fair Trade Commission, the European Commission, the Canadian Competition Bureau, the Korean Fair Trade Commission, the Mexican Federal Economic Competition Commission and the Australian Competition and Consumer Commission – to detect and prosecute these illegal cartels. We executed search warrants in the United States at the same time our law enforcement partners were conducting searches abroad.
As a result of these efforts – and including today’s charges – a total of 20 companies and 21 executives have been charged in this ongoing investigation. All 20 companies have either pleaded guilty or have agreed to plead guilty. All told, they have also agreed to pay more than $1.6 billion in criminal fines.
These enforcement actions send a clear and consistent message to all who would take advantage of consumers. The Department of Justice is determined to hold accountable the companies and individuals that are responsible for this cartel behavior that undermines competition in the marketplace and causes millions of Americans to pay more for the products they use every day.
Seventeen of the 21 executives charged so far – including the two executives, one Japanese citizen and one American citizen, who have agreed to plead guilty today – have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
I want to thank the agents and prosecutors who have worked tirelessly to break up these cartel rings. I know you will continue to dedicate your time and energy to this important investigation.
And now, Scott will provide additional details on the cases we have announced today.