Record $30M fine obtained by Competition Bureau against Japanese Auto Parts Supplier

OTTAWA, April 18, 2013 — Following an investigation by the Competition Bureau, a Japanese supplier of motor vehicle components was fined $30 million by the Ontario Superior Court of Justice for its participation in a bid-rigging conspiracy. This fine is the largest ever ordered by a court in Canada for a bid-rigging offence.

Yazaki Corporation (Yazaki) pleaded guilty to bid-rigging under the Competition Act for its participation in an international cartel with other Japanese suppliers of motor vehicle components. This is the second guilty plea in the largest bid-rigging investigation ever undertaken by the Bureau.

The evidence shows that Yazaki secretly conspired with other Japanese motor vehicle components manufacturers to submit bids or tenders in response to requests for quotations to supply Honda of Canada Manufacturing Inc. (Honda) and Toyota Motor Manufacturing Canada Inc. (Toyota) with motor vehicle components.

"Cartelists must be penalized for defrauding Canadians," said John Pecman, Interim Commissioner of Competition. "The record fine in this matter underscores the seriousness of bid-rigging offences and sends a strong message that companies need to comply with the law."

Yazaki's plea relates to wire harnesses supplied to Honda and Toyota for the 2005.5 Honda Ridgeline, 2006 Honda Civic and 2006 Toyota Corolla/Matrix models.

Yazaki's total volume of commerce in Canada, affected by the bid-rigging conspiracy, was approximately US$260 million.

With Canada representing Toyota's seventh-largest global sales market, approximately 50 per cent of the products it sells in this country are made in Ontario. As an example, over 800,000 Corollas/Matrix were produced in Canada from 2006 through 2009 and assembled in Ontario. Nearly all Civics sold in Canada, with the exception of the Civic Hybrid, are built in Ontario.

"Bid-rigging has a negative impact on the Canadian economy," said Matthew Boswell, Acting Senior Deputy Commissioner of Competition. "In this case, our investigation determined that Honda and Toyota were denied the economic benefits of a competitive bidding process with respect to the wire harnesses used in some of the most popular cars sold in Canada."

On April 4, 2013, Furukawa was fined $5 million for rigging bids for electrical boxes, such as fuse boxes, relay boxes and junction blocks, sold to Honda between 2000 and 2010, for the 2001 and 2006 Honda Civic models.

The Bureau's investigation relates only to motor vehicle components manufacturers. There is no allegation of wrongdoing against motor vehicle manufacturers, such as Toyota and Honda, the customers of the companies under investigation.

The Bureau became aware of the motor vehicle components cartel by way of its Immunity Program. The investigation also benefitted from the cooperation of numerous companies under the Bureau's Leniency Program. Yazaki and Furukawa both participated in the Bureau's Leniency Program and provided substantial assistance to the Bureau and the Public Prosecution Service of Canada. The two companies' cooperation has saved considerable costs associated with the investigation and prosecution.

The Bureau's ongoing investigation is being coordinated with a number of other jurisdictions, including the United States, Japan, the European Union and Australia.

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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