TAKATA escapes penalty in EU Antitrust Decision on car safety equipment supplier’s cartel
The European Commission (“EU/Commission”),in a Press Release dated 5th March 2019 , publishing its 29th settlement case since the introduction of the settlement procedure for cartels in June 2008, has imposed a total fine of Euro 368,277,000 on Autoliv and TRW for participating in two cartels for the supply of car seatbelts, airbags and steering wheels to European car producers. However, the third member of the cartels viz Takata was granted full immunity under the 2006 Leniency Notice for revealing the two cartels and thereby avoiding an aggregate fine of 195 million Euros.
Interestingly, the Commission’s investigation was initiated with a leniency application filed by Takata and eventually all the suppliers acknowledged their involvement in the cartels and agreed to settle the case. It was found that the three car equipment suppliers exchanged commercially sensitive information and coordinated their market behaviour through meetings at the supplier’s business premises, restaurants, hotels and as well as phone calls and e-mail exchanges.
The Commission’s investigation revealed the existence of two infringements- (i) sales of seatbelts, airbags and steering wheels to the Volkswagen Group and (ii) sales of seatbelts, airbags and steering wheels to the Volkswagen Group the BMW Group. It was found that the cartel pertaining to the sales to Volkswagen began on 04.01.2007 and lasted till 30.03.2011, with TRW leaving the cartel 2 days prior to the other two members. As regards the cartel pertaining to sales to BMW, it was found that Autoliv and Takata were members of the cartel since 28.02.2008 and later TRW joined on 05.06.2008, and this cartel lasted till 17.02.2011 between Takata and TRW as Autoliv had ceased to be part of it on 16.09.2010. The Cartel was likely to have a significant impact on European Customers as the Volkswagen Group and BMW Group were found to be selling around three of every ten cars bought in Europe.
It is pertinent to mention that the Commission had already fined Autoliv and Takata for participating in one or more of four cartels concerning the supply of occupant safety braking systems to certain Japanese car manufacturers and TRW for the provision of Hydraulic Braking Systems (HBS) to Daimler and BMW alongwith other entities found to be indulged in anti-competitive practices in the automotive parts sector. This decision brought the total amount of fines imposed on the automotive parts sector to 2.15 Billion Euros.
While imposing fines, Autoliv and TRW, in addition to 50% and 30% reduction respectively under the 2006 Leniency Note for cooperating the Commission, were granted a 10% reduction to the original fines imposed under the Commission’s 2008 Settlement Notice.
Comment : This decision is likely to have impact on the Indian subsidiaries of the three OES since the safety equipment supplied at cartelized prices to the two OEMs , Volkswagen and BMW , may have been sold in India as well . To my knowledge , CCI is already investigating many cartels involving auto motive component suppliers to OEMs based on leniency applications filed by some of the cartel members.