Ball busting
On Friday, 12 July 2013 the ACCC filed proceedings against Japanese ball bearing manufacturer Koyo Australia Pty Ltd in the Federal Court, seeking pecuniary penalties as well as declarations and injunctions.
As the ACCC’s press release notes, the allegations are that Koyo and at least two of its competitors made and gave effect to two separate cartel arrangements to increase the price of bearings to their aftermarket customers in the car and industrial machinery manufacturing sectors.
The prosecution follows on from enforcement action in other countries, including:
- Japan’s Fair Trade Commission fining three corporations ¥13.4 billion (€108 million) in March 2013 for agreeing to increase the price of bearings from 2010. However, Koyo’s parent JTEKT succeeded in obtaining immunity and so was exempt from fines.
- Canada’s Competition Bureau fining JTEKT C$5 million for bid-rigging on supplies of bearings between 2007 and 2013. The CCB’s July 2013 press release notes that the fine was reduced after JTEKT cooperated with the investigation, although it was not the immunity applicant.
In Australia, Koyo has admitted its involvement and cooperated with the ACCC, with first directions scheduled for 14 August 2013.
Other ongoing cartel prosecutions by the ACCC include proceedings in relation to air cargo, land cables, forklift gas supply and wire harnesses. As a number of these cases, and the Koyo proceedings, relate to conduct after July 2009, it is hoped that they will provide some further guidance on the application of the new penalty regime that came into effect that month. Under the higher penalty regime, the maximum penalty was increased to the greater of 10% of turnover, $10 million and three times the gain from the contravention.
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