Japanese Bearings Manufacturer Fined $5 Million

OTTAWA, ONTARIO -- (Marketwired) -- Jul 12, 2013 -- The Competition Bureau announced today that JTEKT Corporation (JTEKT), a Japanese bearings manufacturer, pleaded guilty to two counts of bid-rigging under the Competition Act and was fined $5 million by the Superior Court of Quebec in Gatineau for its participation in an international bid-rigging cartel.

JTEKT's plea relates to automotive wheel hub unit bearings supplied to Toyota Motor Manufacturing Canada Inc. (Toyota) between 2007 and 2013. The evidence shows that JTEKT secretly conspired with another Japanese bearings manufacturer to submit bids or tenders in response to requests for quotations to supply Toyota. JTEKT is the first party to plead guilty in relation to the investigation into automotive bearings. There is no allegation of wrongdoing against Toyota, the customer of the companies under investigation.

"Companies that engage in bid-rigging and other cartel offences manipulate and suppress the competitive process to the detriment of all Canadians," said John Pecman, Commissioner of Competition. "Cracking down on cartel offences that impact Canadians has been, and will continue to be, a top priority for the Bureau."

Canada is Toyota's seventh-largest global sales market, and approximately 50 percent of the vehicles it sells in this country are made in Ontario. As an example, 271,193 Corollas, 119,908 Matrix and 81,929 RAV4s were produced in Canada in 2008 and 2009 and assembled in Ontario.

The Bureau became aware of the bearings cartel by way of its Immunity Program. Under the Immunity Program, the first party to disclose to the Bureau an offence not yet detected or to provide evidence leading to a referral of evidence to the Public Prosecution Service of Canada (PPSC) may receive immunity from the PPSC, provided that it fully cooperates with the Bureau's investigation and any ensuing prosecution. Subsequent cooperating parties may receive lenient treatment under the Bureau's Leniency Program. These programs provide powerful incentives for organizations and individuals to come forward and cooperate with the Bureau's investigations. JTEKT participated in the Bureau's Leniency Program and provided substantial assistance to the Bureau and the PPSC. The company's cooperation has saved considerable costs associated with the investigation and prosecution.

Under the bid-rigging provision of the Competition Act, it is a criminal offence for two or more bidders, in response to a call or request for bids or tenders, to agree on the bids submitted, to agree that one party will refrain from bidding or to agree that one party will withdraw a submitted bid, in each case without informing the person calling for the bids of this agreement.

Earlier this year, under a separate Bureau investigation, Furukawa Electric Co., Ltd. and Yazaki Corporation, two Japanese suppliers of motor vehicle components, pleaded guilty to bid-rigging under the Competition Act and were respectively fined $5 million and $30 million for their participation in an international cartel.

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

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