Home Cincinnati Press Releases 2014 Japanese Automotive Parts Manufacturer Agrees to Plead Guilty to Price Fixing and Bid Rigging on Automobile Parts...

Japanese Automotive Parts Manufacturer Agrees to Plead Guilty to Price Fixing and Bid Rigging on Automobile Parts Installed in U.S. Cars
Company Agrees to Pay $19.9 Million Criminal Fine

U.S. Department of Justice April 23, 2014
  • Office of Public Affairs (202) 514-2007/TDD (202) 514-1888

WASHINGTON—Showa Corp., an automotive parts manufacturer based in Saitama, Japan, has agreed to plead guilty and to pay a $19.9 million criminal fine for its role in a conspiracy to fix prices and rig bids for pinion-assist type electric powered steering assemblies installed in cars sold in the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in the U.S. District Court for the Southern District of Ohio in Cincinnati, Showa engaged in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for and to fix, stabilize, and maintain the prices of certain pinion-assist type electric powered steering assemblies sold to Honda Motor Co. Ltd. and certain of its subsidiaries in the United States and elsewhere. In addition to the criminal fine, Showa has agreed to cooperate with the department’s ongoing investigation. The plea agreement will be subject to court approval.

“Today’s guilty plea marks the 27th time a company has been held accountable for fixing prices on parts used to manufacture cars in the United States,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division and its law enforcement partners remain committed to prosecuting illegal cartels that harm U.S. consumers and businesses.”

According to the charge, Showa and its co-conspirators carried out the conspiracy through meetings, conversations, and communications in which they discussed and agreed upon bids and price quotations on pinion-assist type electric powered steering assemblies to be submitted to Honda. Showa then submitted quotations in accordance with those agreements and sold pinion-assist type electric powered steering assemblies at collusive and noncompetitive prices. Showa and its co-conspirators monitored adherence to the agreed-upon bid-rigging and price-fixing scheme. The conspirators kept their conduct secret by using code names and meeting at remote locations, among other things. Showa’s involvement in the conspiracy lasted from at least as early as 2007 until as late as September 2012.

Showa manufactures and sells pinion-assist type electric powered steering assemblies. These devices provide power to the steering gear pinion shaft from electric motors to assist the driver to more easily steer the automobile. Pinion-assist type electric powered steering assemblies include an electronic control unit and link the steering wheel to the tires but do not include the column, intermediate shaft, steering wheel, or tires.

Including Showa, 27 companies and 24 executives have pleaded guilty or agreed to plead guilty in the division’s ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of $2.3 billion in criminal fines.

Showa Corp. is charged with price fixing and bid rigging 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.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anti-competitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office with assistance from the U.S. Attorney’s Office for the Southern District of Ohio. Anyone with information on price fixing, bid rigging, and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Cincinnati Field Office at 513-421-4310.


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