On April 4, 2013 before Justice L. De Sousa of the Ontario Superior Court of Justice, a Japanese supplier of motor vehicle components, Furukawa Electric Co., Ltd. (“Furukawa”), pleaded guilty for bid-rigging, in violation of subsection 47(2) of the Competition Act. The guilty plea arises from Furukawa’s participation in an international bid-rigging conspiracy. Furukawa was fined $5 million, the largest ever ordered by a court in Canada for a bid-rigging offence under the Competition Act.
According to the Competition Bureau’s press release, the evidence showed that Furukawa secretly conspired with other Japanese motor vehicle components manufacturers to submit bids or tenders in response to requests for quotations to supply an automobile manufacturer with certain motor vehicle components. In particular, the guilty plea relates to electrical boxes, including fuse boxes, relay boxes and junction blocks, sold to the automobile manufacturer between 2000 and 2010 for the 2001 and 2006 vehicles. The reported total volume of commerce in Canada affected by the bid-rigging conspiracy was approximately $41 million. The Competition Bureau’s press release can be accessed here.
According to the Competition Bureau, it became aware of the motor vehicle components cartel by way of its Immunity Program. It noted that Furukawa participated in the Bureau's Leniency Program and provided substantial assistance to the Bureau and the Public Prosecution Service of Canada.
The Interim Commissioner of Competition, John Pecman, referred to this matter in a speech to the C.D. Howe Institute on April 5, the day after the guilty plea was entered. He noted, in part:
Just yesterday, we witnessed the effectiveness of our Immunity and Leniency program, with the announcement of the largest fine ever ordered by a court in Canada for a bid-rigging offence under the Competition Act. As part of an ongoing investigation by the Bureau, Furukawa Electric Co., a Japanese supplier of motor vehicle components was fined $5 million by the Ontario Superior Court of Justice for its participation in an international bid-rigging conspiracy.
The full speech can be accessed here.
Consistent Trend of Increased, Coordinated Enforcement
According to the Competition Bureau, it is engaged in an ongoing investigation into the motor vehicle components industry. The investigation is being coordinated with a number of other jurisdictions, including the United States, Japan, the European Union and Australia.
This recent development underscores a number of consistent trends:
- global businesses are subject to increasing scrutiny by Canada’s Competition Bureau;
- antitrust investigations, prosecutions, convictions and sanctions are growing in Canada; and
- antitrust investigations are increasingly global, with multiple regulators investigating and prosecuting the same conduct, either working together or in parallel.
These trends are expected to continue.
* Huy Do is a partner in Fasken Martineau’s Antitrust/Competition group. Tony Di Domenico is a partner in Fasken Martineau’s Litigation and Antitrust/Competition groups.