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Japanese bearings manufacturer fined $5M for bid-rigging

International cartel involves wheel hub unit bearings supplied to Toyota.


Assembling Toyota’s RAV4s in Woodstock, Ont. Photo: Toyota

OTTAWA — JTEKT Corp., a Japanese bearings manufacturer, pleaded guilty to two counts of bid rigging under the Competition Act and was fined $5 million by the Superior Court of Quebec in Gatineau for its participation in an international bid-rigging cartel.

JTEKT’s plea relates to automotive wheel hub unit bearings supplied to Toyota Motor Manufacturing Canada Inc. between 2007 and 2013.

The Competition Bureau said evidence shows JTEKT secretly conspired with another (unnamed) Japanese bearings manufacturer to submit bids or tenders in response to requests for quotations to supply Toyota.

The bearings supplier is the first company to plead guilty in the automotive bearings investigation.

The cartel came to light under the Bureau’s Immunity Program, where the first party to disclose an undetected offence or provide evidence leading to a referral of evidence to the Public Prosecution Service of Canada (PPSC) may receive immunity from the PPSC, provided it fully cooperates with the Bureau’s investigation and any ensuing prosecution. Subsequent cooperating parties may also receive lenient treatment for saving costs associated with the investigation and prosecution.

Canada is Toyota’s seventh-largest global sales market, and approximately 50% of the vehicles it sells are made in Ontario. In 2008 and 2009, it produced 271,193 Corollas, 119,908 Matrixes and 81,929 RAV4s.

Under the bid-rigging provision of the Competition Act, it’s a criminal offence for two or more bidders to agree on bids submitted, to agree that one party will refrain from bidding or to agree that one party will withdraw a submitted bid, in each case without informing the person calling for the bids.

Earlier this year, under a separate Bureau investigation, Furukawa Electric Co. Ltd. and Yazaki Corp., two Japanese suppliers of motor vehicle components, pleaded guilty to bid rigging under the Competition Act and were fined $5 million and $30 million for their participation in an international cartel.