Repeat offending the reason for Bridgestone’s US$425 million fine

Earlier today, Bridgestone shared news that it has entered into a plea agreement with the US Department of Justice on antitrust activities and accepted a $425 million fine. But it omitted to mention that the amount to be paid is so large because this isn’t the first time Bridgestone has been found guilty of price-fixing in the United States.

In a statement published yesterday, the Department of Justice confirmed that Bridgestone’s failure to disclose its participation in a “anti-vibration rubber parts conspiracy” when it pleaded guilty to price-fixing and Foreign Corrupt Practices Act violations in the marine hose industry in October 2011 – for which it was penalised $28 million – was a “factor in determining the $425 million fine.”

“The Antitrust Division will take a hard line when repeat offenders fail to disclose additional anticompetitive behaviour,” said Brent Snyder, deputy assistant attorney general for the Antitrust Division’s criminal enforcement programme within the Department of Justice. “Today’s significant fine reaffirms the division’s commitment to holding companies accountable for conduct that harms US consumers.”

According to a one-count felony charge filed on 13 February in the US District Court for the Northern District of Ohio in Toledo, Bridgestone engaged in a conspiracy to allocate sales of, to rig bids for and to fix, raise and maintain the prices of automotive anti-vibration rubber parts it sold to Toyota Motor Corp., Nissan Motor Corp., Fuji Heavy Industries Ltd., Suzuki Motor Corp., Isuzu Motors Ltd. and certain of their subsidiaries, affiliates and suppliers, in the United States and elsewhere. In addition to the criminal fine, Bridgestone also has agreed to cooperate with the department’s ongoing auto parts investigations.

The charges state that Bridgestone and its co-conspirators carried out the conspiracy through meetings and conversations in which they discussed and agreed upon bids, prices and allocating sales of certain automotive anti-vibration rubber products. After exchanging this information with its co-conspirators, Bridgestone submitted bids and prices in accordance with those agreements and sold and accepted payments for automotive anti-vibration rubber parts at collusive and noncompetitive prices. Bridgestone’s involvement in the conspiracy to fix prices of anti-vibration rubber parts lasted from at least January 2001 until at least December 2008.

“The Cleveland Division of the FBI is committed to aggressively investigating price-fixing and other antitrust violations,” said special agent in charge Stephen D. Anthony. “The illegal activity in this case threatened the basic tenet of free competition. We are pleased with the acceptance of responsibility along with the significant penalty which will be paid by Bridgestone for this conspiracy to fix prices. Together with our partners in the Department of Justice’s Antitrust Division, we will continue to combat illegal practices which threaten consumers across the United States.”

Including Bridgestone, 26 companies have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the automotive parts industry. The companies have agreed to pay a total of more than $2 billion in criminal fines. Additionally, 28 individuals have been charged. Bridgestone is charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The Department of Justice says Bridgestone’s prosecution is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. The charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the US Attorney’s Office for the Northern District of Ohio.