Commission brings wire harness cartelists to book

Alex Haffner, of Dentons as the firm is now, spoke at the Motor Law conference this year about the world-wide action being taken against cartels in the car parts industry. In this guest post, he brings us up-to-date with recent developments ...

On 10 July, the European Commission announced that it had imposed fines totalling €141 million on four Japanese car parts suppliers. The fines relate to the operation of five separate price-fixing and bid-rigging cartels for the supply of wire harnesses to Toyota, Honda, Nissan and Renault.

Wire harnesses are the "central nervous system" of a car and transmit electrical power throughout a vehicle. The Commision's investigation, which began with unannounced "dawn raid" inspections of the cartelists in February 2010, found that the companies concerned had coordinated the prices and allocation of supplies of wire harnesses. Contacts between the cartelists took place in both Japan and the EEA. Some of those contacts were designed to rig the tenders carried out by the car manufacturers over a significant period (in the case of Toyota, for more than nine years).

One parts supplier, Sumitomo, received full immunity as it was the first company to confess to its participation in the cartels to the Commission - it otherwise would have received a €291 million fine. The other companies also received reductions in their fines of between 20 and 50 per cent because they too subsequently acknowledged their participation in the cartels and their liability for them. This so-called "settlement procedure" helped to speed up the Commission's investigation significantly.

Somewhat surprisingly, this is the Commission's first cartel decision of 2013. Of greater interest to the automotive industry, though, is that it represents the first of what are likely to be a number of European decisions concerning cartel activity in car parts supply. Investigations are already ongoing into allegations of similar practices in respect of occupant safety systems, ball bearings, thermal systems and lighting.

The Commission's full decision will be published in due course. In the meantime, those affected by the cartelists' actions are likely to be considering how they might be able to obtain damages from them. Last month, the Commission adopted proposals for a Directive which aims to make it easier for such "follow-on" actions to get off the ground in Europe, where take-up has been slow compared to other countries such as the US and Canada. Several follow-on claims have already been launched in those jurisdictions following fining decisions issued by the local competition authorities.