Three Foam Manufacturers Plead Guilty in Price Fixing Scheme
Companies Agree to Pay a Total of $6.1 Million in Criminal Fines
|U.S. Department of Justice June 27, 2014|
WASHINGTON—Three manufacturers of polyurethane foam used to create interior components for automobiles pleaded guilty today to participating in a scheme to fix prices to customers, the Department of Justice announced.
Riverside Seat Co., Woodbridge Foam Fabricating Inc. and SW Foam LLC pleaded guilty to a one-count felony charge in the U.S. District Court for the Eastern District of New York in Brooklyn. According to the charge, the companies conspired with others to fix prices for polyurethane flexible slab stock automotive foam in the U.S. and elsewhere from at least as early as June 9, 2008 until at least April 20, 2009. The companies have agreed to pay a total of $6,148,800 in criminal fines and to cooperate with the department’s ongoing investigation.
“Today’s charges demonstrate the Antitrust Division’s commitment to holding companies accountable for conspiracies that affect components used in products that consumers rely on every day,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously prosecute companies that engage in price-fixing schemes that subvert normal competitive processes and defraud American consumers and businesses.”
Riverside Seat, Woodbridge, and SW Foam manufactured polyurethane flexible slab stock automotive foam – a low-density, slab stock, flexible foam used as a component of automotive interior parts, including seats, headliners, headrests, door panels and armrests. Polyurethane flexible slab stock automotive foam includes only the foam itself and does not include any automotive parts in which such foam may be a component.
According to the charge, the companies and their co-conspirators discussed polyurethane foam prices and agreed to coordinate the timing and amount of price increases to customers. The companies carried out the agreement and exchanged information for the purpose of monitoring and enforcing adherence to the agreement.
The three manufacturers are 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.
Today’s pleas are the result of an ongoing federal antitrust investigation being handled by the Antitrust Division’s New York Office, with assistance from the Cleveland Field Office of the FBI and the New York Field Office of the FBI. Anyone with information concerning price fixing or other anti-competitive conduct in the polyurethane foam industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.