Bridgestone Admits Guilt in U.S. Price-Fixing Case
The Bridgestone Corporation became the latest automotive supplier to plead guilty to charges of conspiring to fix the prices of parts sold to automakers here and abroad, the Justice Department said on Thursday.
The company, which is based in Tokyo and is the world’s largest producer of tires and rubber, also agreed to pay a $425 million criminal fine. That amount was more than double the next-highest fine levied in the investigation because of the company’s previous conviction of conspiring to fix prices in the marine hose industry, the department said. Bridgestone paid a $28 million fine in 2011, but didn’t disclose its similar activity in the automotive supply chain.
“The Antitrust Division will take a hard line when repeat offenders fail to disclose additional anticompetitive behavior,” Brent Snyder, deputy assistant attorney general for the antitrust division’s criminal enforcement program, said in a statement. “Today’s significant fine reaffirms the division’s commitment to holding companies accountable for conduct that harms U.S. consumers.”
More than two dozen Japanese automotive suppliers have now agreed to plead guilty to conspiring to fix the prices of parts sold to automakers in the United States and abroad, in a three-year inquiry that has quietly become the largest criminal investigation ever pursued by the Justice Department’s Antitrust Division.
The investigation into the automotive supply chain has yielded more than $2 billion in criminal fines so far and is the division’s largest both in scope and potential volume of commerce affected by the illegal conduct, the department said.
The scope of the investigation is especially notable because international cartels “are remarkably hard to prosecute, taking a massive effort and great deal of cooperation” across jurisdictions, according to Christopher S. Yoo, an antitrust professor at University of Pennsylvania Law School.
The investigation also underscores cultural differences in the way business is conducted in Japan and the United States, Mr. Yoo said.
“In many countries, agreements on prices and production are an accepted way to get through economic tough times,” he said. But in the last two decades, American regulators “have taken an American-style view that economic downturns are not justification for price-fixing.”
Bridgestone said in a statement that it has cooperated with authorities since being informed of the investigation in May 2012 and that, through the investigation, it “became aware that certain employees had engaged in certain acts in violation of U.S. antitrust laws.”
The wide-ranging prosecution is unusual in the auto industry, according to William J. Kohler, co-chairman of the Clark Hill firm’s automotive practice in Detroit.
“The automotive industry has not previously been an object of scrutiny and criminal allegations,” Mr. Kohler said, adding that the price-fixing occurred at a time of consolidation among major suppliers. “When compared to other industries, I believe the compliance record for the automotive industry looks very good.”
So far, 26 suppliers and 28 executives have agreed to plead guilty to price-fixing charges.
Bridgestone was charged with a one-count felony in United States District Court for the Northern District of Ohio in Toledo for conspiring to allocate sales, rig bids and fix prices of parts sold to Toyota, Nissan, Suzuki, Isuzu and Fuji Heavy Industries in the United States between 2001 and 2008.