European regulator fines auto-parts cartel $1.32 bn

The European regulator has slapped a total of €953 million ($1.32 billion) fine on six European and Japanese auto-part companies for fixing prices of ball bearings supplied to car and truck manufacturers.

"Today's decision is a further milestone in the Commission's ongoing effort to bust cartels in the markets for car parts. It is incredible to see that one more car component was cartelized,'' said, Joaquín Almunia, vice president in charge of competition policy at the European Commission (EC).

Companies involved in the cartel included two European firms, SKF, the world's largest maker of ball bearings, and Germany's Schaeffler Group, and four Japanese companies, JTEKT Corp, NSK Ltd, NFC and NTN Corp. 

The Brussels-based regulator said that the six companies operated as a cartel over a seven-year period, from April 2004 until July 2011, across the European Economic Area in the market for automotive bearings in the EU, which is estimated to be at least €2 billion a year.

Automotive bearings are used by car, truck and car part manufacturers to reduce friction between moving parts inside a vehicle, like wheel bearings, bearings for gearbox, transmission, alternator or air conditioning systems.

The EC said that the companies colluded to secretly coordinate their pricing strategy vis-à-vis automotive customers.

The cartel coordinated the passing-on of steel price increases to their automotive customers, colluded on requests for quotations and for annual price reductions from customers and exchanged commercially sensitive information.

Japanese company JTEKT escaped a €86-million fine for revealing the existence of the cartel to the EC, while NSK, NFC, SKF and Schaeffler received reductions in fines for cooperating in the investigation.

Since all companies agreed to settle the case with the EC, their fines were further reduced by 10 per cent.

Schaeffler and SKF received the biggest fines of €370 million and €315 million, respectively, while NTN was fined €201.4 million, NSK €62.4 million, and NFC €3.96 million.

"I hope the fines imposed will deter companies from engaging in such illegal behaviour and help restore competition in this industry,'' said, Almunia.

(See: Full Text of European Commission statement)