Corning International Kabushiki Kaisha Facing $66 million in Fines for Market Fixation

Corning International Kabushiki Kaisha (“Corning International KK”), based in Tokyo, has been charged with participation in a twelve-year-long conspiracy to rig bids, fix prices, and allocate sales of ceramic substrates used in the manufacture of catalytic converters.

 Corning International KK has agreed to plead guilty, to cooperate in the ongoing investigation and to pay a fine of $66.5 million. The agreement is subject to court approval.

With this charge, the total number of corporate defendants charged in the conspiracy has reached forty. In addition, fifty-nine individuals have been charged.

All told, the defendants have agreed to pay fines in excess of $2.7 billion.

Multinational automobile companies, including Ford Motor Company, General Motors LLC, and Honda Motor Company Ltd were victims of the conspiracy.

Corning International KK and its coconspirators apparently profited nicely from their conspiracy, causing purchasers to pay a premium for an alternative-free good, inducing profit and revenue decrease.

 

[The Department of Justice press release on this case is reproduced below. It is followed by a link to the article and a link to the charging document.]

 

Corning International Kabushiki Kaisha to Pay $66.5 Million for Fixing Prices of Automotive Parts

 

Corning International Kabushiki Kaisha (Corning International K.K.) has agreed to plead guilty and pay a $66.5 million criminal fine for conspiring to fix prices, rig bids and allocate the market for ceramic substrates sold in the United States and elsewhere, and used in catalytic converters supplied to automobile manufacturers in the United States and elsewhere, the Justice Department announced today.

 

According to the felony charge filed today in U.S. District Court for the Eastern District of Michigan, Corning International K.K., based in Tokyo, conspired to fix prices, rig bids and allocate the market for ceramic substrates, from at least as early as July 1999 until on or about July 2011.  The products were installed in automotive emissions control systems and supplied to automobile manufacturers including Ford Motor Company, General Motors LLC, Honda Motor Company Ltd., and certain of their subsidiaries, affiliates, and suppliers in the United States and elsewhere.  Corning International K.K. agreed to cooperate in the department’s ongoing investigation.  The plea agreement will be subject to court approval.

 

“Corning International K.K. – and Nobuhiko Niwa, its former executive, who was indicted last week – spent more than a decade colluding on sales of an important component of emissions systems for use in cars made and sold in the United States and elsewhere,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “But they have now been held accountable for the competitive harm they caused.”

 

“Corning International K.K.’s conspiracy to rig bids and fix prices brought the company increased revenues at a cost to auto manufacturers, suppliers, and ultimately, consumers,” said Special Agent in Charge David P. Gelios of the FBI’s Detroit Division.  “Attempts to thwart the free market system are damaging to our economy, and thereby its consumers, and will be actively investigated and prosecuted.”

 

Including Corning International K.K., 40 companies have been charged in connection with this investigation and have agreed to pay more than $2.6 billion in criminal fines.  In addition, 59 individuals have been charged, including a former executive of Corning International K.K.  On May 11, 2016, a federal grand jury in the Eastern District of Michigan returned an indictment against Nobuhiko Niwa, a Japanese national, for his role in the conspiracy.  Niwa was charged with participating in the conspiracy from at least as early as July 1999 until on or about July 2011.

 

This charge results from an ongoing investigation conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI Headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.

 

Original Article

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