Panasonic, Sanyo Plead Guilty In Battery Price-Fixing Scheme
Enid Burns for redOrbit.com – Your Universe Online
Panasonic and its subsidiary SANYO are among a handful of electronics firms being tried for price fixing by the US Department of Justice. According to documents from the DOJ, Panasonic and Sanyo agreed to plead guilty and pay fines in separate price-fixing conspiracies.
Panasonic will pay $45.8 million in fines for an automotive parts conspiracy while SANYO will pay a $10.73 million fine for the role it played in a battery cell scheme.
LG Chem Ltd. is another firm caught up in the price-fixing scheme. The producer of secondary batteries will also plead guilty and pay a $1.06 million criminal fine for the price fixing of battery cells.
The DOJ said that the SANYO and LG Chem guilty pleas are “the first in the department’s ongoing investigation into anticompetitive conduct in the cylindrical lithium ion battery cell industry.”
All told, a three-count felony charge was filed against Panasonic in the US District Court for the Eastern District of Michigan. SANYO and LG Chem faced one-count felony charges in the US District Court for the Northern District of California. All companies have agreed to cooperate in ongoing antitrust investigations as part of the plea agreements.
Panasonic was charged with price fixing for automotive parts such as switches, steering angle sensors and automotive high intensity discharge (HID) ballasts. Other parts named in the allegations include turn switches, wiper switches, combination switches and door courtesy switches sold to Toyota Motor Corp. and Toyota Motor Engineering & Manufacturing in North America. The price-fixing allegedly occurred between September 2003 and February 2010, however, investigators believe the time period during which the price fixing took place could be even longer.
The parts were used in the manufacture of cars sold in the United States and abroad. SANYO and LG Chem were charged with price-fixing of cylindrical lithium ion battery cells that were sold worldwide, and used in notebook computer battery packs.
“Panasonic is charged with participating in separate price-fixing conspiracies affecting numerous parts used in cars made and sold in the United States while its subsidiary was also fixing prices on battery cells used by consumers of notebook computers,” said Scott D. Hammond, deputy assistant attorney general for the Antitrust Division’s criminal enforcement program, in a statement.
“Pleading guilty and cooperating with the division’s ongoing investigations is a necessary step in changing a corporate culture that turned customers into price-fixing victims.”
And it isn’t just the corporate entities who be paying the price for these scheme but individuals as well, said the DOJ.
“Including Panasonic, 11 companies and 15 executives have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than 874 million in criminal fines as a result of the auto parts investigation. Additionally, 12 of the individuals have been sentenced to serve jail sentences ranging from a year and a day to two years each. The three additional executives have agreed to serve time in prison and are currently awaiting sentencing,” read the DOJ statement.
“The FBI remains committed to protecting American consumers and businesses from corporate corruption. The conduct of Panasonic, SANYO, and LG Chem resulted in inflated production costs for notebook computers and cars purchased by US consumers,” said Joseph S. Campbell, FBI Criminal Investigative Division deputy assistant director, in a statement. “These investigations illustrate our efforts to ensure market fairness for US businesses by bringing corporations to justice when their commercial activity violates antitrust laws.”