ACCC plays a role in busting car parts price-fixing cartels

Updated

The Australian Competition and Consumer Commission has helped an international probe into the price fixing of a broad range of car parts that has now ensnared 20 companies and 21 executives.

Nine companies based in Japan and two executives will plead guilty and pay almost $US745 million in fines for their roles in long-running conspiracies to fix the prices of auto parts sold to United States car manufacturers.

The companies have agreed to pay $US1.6 billion in fines overall.

ACCC chairman Rod Sims says it is difficult to know how widespread cartel activity is in other industries in Australia.

He says the ACCC's investigations fall across a broad range of industries.

"But I think we're just seeing enough of a continuing stream to think that this activity does go on," he said.

"When you think about it, for many people trying to make a profit in an industry, they might think it's quite natural activity.

"The number of times companies would say, 'well, if we're trying to compete on price we're just cutting each other's throat, much better to get in touch with each other and make sure we don't do that so we can all earn a reasonable living' - that sort of conversation underpins a conversation you see in cartel activity.

"That conversation is an easy one for people to drift into and that's what makes me think there is quite a lot out there as well as the activity we're seeing."

Mr Sims would not be drawn on which industries he suspects of cartel activity.

"I would very much like to (tell you), but we must keep those investigations confidential," he said.

"Suffice to say it's actually quite a wide range of industries we're looking at, they're generally reasonably concentrated industries, but not always, but we have a range of investigations going on and I'm afraid they must remain confidential."

ACCC gets an application a month for immunity

Meanwhile, Mr Sims says he is receiving one application a month from companies asking for immunity in return for information about cartel activity.

The ACCC has already launched Federal Court action against three car parts suppliers over alleged cartel conduct.

Mr Sims says the ACCC has received about 100 immunity applications since it introduced its immunity policy about five years ago.

"We get one immunity application a month, so that's somebody involved in a cartel that comes to us, they then are required to tell us everything they know about the cartel and in return, we give them immunity from prosecution," he said.

"The fact that we're getting one a month and continuing to get one a month is important.

"Secondly, what we're seeing in some of the concentrated sectors of the Australian market, it's very hard to prove but you do see behaviour that is concerning.

"What we do in those cases is contact the companies, we let them know our immunity policy and quite often when we do that they'll also come in for immunity."

Know more? investigations@abc.net.au

Topics: consumer-protection, business-economics-and-finance, regulation, australia

First posted