The largest criminal antitrust investigation in the history of the Justice Department just got larger. It has nothing to do with telecommunications or giant mergers or any exotic items, though; it’s all about auto parts. A worldwide price-fixing and bid-rigging conspiracy related to those auto parts has resulted in 27 guilty pleas and over $2.3 billion in fines — and the investigation is still underway.
The AP reported this weekend on where the probe stands right now. It first became public back in 2010, when the FBI raided three auto parts suppliers in Detroit. Since then, the scope has only continued to grow.
So far over the past four years, 34 individuals have been charged and 27 companies have pled guilty, the AP reports, including nine Japanese suppliers late last year. Collectively, the individuals and companies have to date agreed to pay more than $2.3 billion in fines.
The inflated parts prices affected the end prices of at least 25 million Chrysler, GM, Ford, and Toyota cars, to a total of over $5 billion in parts. An attorney in the DoJ’s antitrust division told the AP, “It’s a very, very safe assumption that U.S. consumers paid more, and sometimes significantly more, for their automobiles as a result of this conspiracy.”
Sometimes apparent price-fixing can be explained away as different companies simply reacting to the same market forces. That is not the case here. “Though the techniques and strategies sometimes differed,” says the AP, “the executives generally carried out the collusion by trading coded emails, meeting at remote locations and destroying documents to avoid paper trails.”
That is indeed a “knowingly formed” conspiracy in the U.S., and it’s very illegal.
The Justice Department has been working with officials in Japan, Australia, and other countries in order to catch and prosecute the responsible parties. Despite all of the charges filed and fines paid since 2010, the DoJ hasn’t finished with the investigations, reports the AP.
Auto Parts Price-Fixing Probe Rattles Industry [Associated Press]