Tokyo-based Bridgestone Corp. has agreed to plead guilty and to pay a $425 million criminal fine for its role in a conspiracy to fix prices of automotive anti-vibration rubber parts installed in cars sold in the United States and elsewhere.
The one-count felony charge was filed Feb. 13, 2014, in U.S. District Court for the Northern District of Ohio in Toledo. According to the U.S. Department of Justice (DOJ), the charge says Bridgestone “engaged in a conspiracy to allocate sales of, to rig bids for and to fix, raise and maintain the prices of automotive anti-vibration rubber parts it sold to Toyota Motor Corp., Nissan Motor Corp., Fuji Heavy Industries Ltd., Suzuki Motor Corp., Isuzu Motors Ltd. and certain of their subsidiaries, affiliates and suppliers.”
In addition to the criminal fine, Bridgestone also has agreed to cooperate with the department’s ongoing auto parts investigations. The plea agreement is subject to court approval.
In the definitive release from the DOJ, in October 2011, Bridgestone pleaded guilty and paid a $28 million fine for price-fixing and Foreign Corrupt Practices Act violations in the marine hose industry, but did not disclose at the time of the plea that it had also participated in the anti-vibration rubber parts conspiracy. Bridgestone’s failure to disclose this conspiracy was a factor in determining the $425 million fine.
Bridgestone is charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
“The Antitrust Division will take a hard line when repeat offenders fail to disclose additional anticompetitive behavior,” says Brent Snyder, deputy assistant attorney general for the Antitrust Division’s criminal enforcement program.
According to the charges, Bridgestone and its co-conspirators “carried out the conspiracy through meetings and conversations in which they discussed and agreed upon bids, prices and allocating sales of certain automotive anti-vibration rubber products. After exchanging this information with its co-conspirators, Bridgestone submitted bids and prices in accordance with those agreements and sold and accepted payments for automotive anti-vibration rubber parts at collusive and noncompetitive prices.
Bridgestone’s involvement in the conspiracy to fix prices of anti-vibration rubber parts lasted from at least January 2001 until at least December 2008.
“The illegal activity in this case threatened the basic tenet of free competition,” says Stephen Anthony, special agent in charge with the Cleveland Division of the FBI. “We are pleased with the acceptance of responsibility along with the significant penalty which will be paid by Bridgestone for this conspiracy to fix prices.”
Including Bridgestone, 26 companies have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the automotive parts industry. The companies have agreed to pay a total of more than $2 billion in criminal fines. Additionally, 28 individuals have been charged.
In an official release, Bridgestone (BSJ, for Bridgestone Japan) acknowledged the plea agreement.
“Since being informed of the investigation in May 2012, BSJ and its subsidiaries have been fully cooperating with the DOJ in connection with its investigation of the manufacturers of AVP (anti-vibration parts). Through the investigation, BSJ became aware that certain employees had engaged in certain acts in violation of U.S. antitrust laws from 2001 to 2008.
“BSJ is confident that the activities which led to the charges ceased in 2008, following full implementation of Bridgestone’s global compliance initiative. In order to reestablish the trust of its customers and the many communities in which it does business, the Bridgestone Group will redouble its efforts to ensure full compliance with all relevant laws and regulations through enhanced education, training and regular internal reviews and assessments.
“BSJ also announced that the inside members of its board of directors and certain of its corporate officers will forego their bonus payments which were scheduled to be made in March. In addition, representative board members and certain of its corporate officer would forfeit a portion of their compensation to underscore the company’s sincere regret for this incident. Also, BSJ will take appropriate disciplinary action against certain responsible employees in accordance with applicable corporate standards.
“The management of the Bridgestone Group is fully committed to ensuring that its global operations and businesses are conducted in an ethical and legal manner. They sincerely regret the actions that resulted in this plea agreement and that they did not discover these activities at an earlier date.”
Bridgestone Corp. says that as a result of entering into the plea agreement, the company will record a special loss of nearly 44.8 billion yen for the fiscal year ending Dec. 31, 2013. Based on the average dollar-yen exchange rate in 2013, that totals $59.5 billion. There will be no revision to the corporation’s 2013 consolidated financial projections as reported in August 2013.
Source: Modern Tire dealer
Published: 06 Feb 2014