Bosch fined $57.8 million by DOJ for price fixing and bid rigging
Tue, Mar 31 2015According to the DOJ, Bosch has agreed to plead guilty to pricing fixing and bid rigging for spark plugs and oxygen sensors supplied to the former DaimlerChrysler, Ford and General Motors. The rigging is said to have occurred between January 2000 and July 2011. Bosch also allegedly played foul with starter motors sold to Volkswagen from January 2009 until at least June 2010.
Bosch and other companies allegedly conspired on the pricing for bids to submit to automakers, and sold the parts at noncompetitive prices. The DOJ filed a one-count felony charge in US District Court for these actions. The company's plea is still subject to court approval, though.
Bosch is only the third European company to be charged in this investigation, according to the DOJ. So far, many of the fined businesses have been from Japan, including Takata, NGK and others. Some execs have claimed price-fixing has been the standard operating procedure in the auto parts industry for a long time.
Robert Bosch GmbH Agrees to Plead Guilty to Price Fixing and Bid Rigging on Automobile Parts Installed in U.S. Cars
Robert Bosch GmbH, the world's largest independent parts supplier to the automotive industry, based in Gerlingen, Germany, has agreed to plead guilty and to pay a $57.8 million criminal fine for its role in a conspiracy to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automobile and internal combustion engine manufacturers in the United States and elsewhere, the Department of Justice announced today.
According to the one-count felony charge filed today in the U.S. District Court of the Eastern District of Michigan, Bosch conspired to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of, spark plugs and oxygen sensors sold to automobile and internal combustion engine manufacturers such as DaimlerChrysler AG, Ford Motor Company, General Motors Company and Andreas Stihl AG & Co., among others, in the United States and elsewhere. Bosch's involvement in the conspiracy lasted from at least as early as January 2000 until at least July 2011. Bosch is also charged with participating in a conspiracy to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of, starter motors sold to Volkswagen AG and certain of its subsidiaries in the United States from at least as early as January 2009 until at least June 2010. Bosch has agreed to cooperate in the department's ongoing investigation. The plea agreement will be subject to court approval.
"The participants in this conspiracy were not located in just one country or region of the world," said Deputy Assistant Attorney General Brent Snyder of the Antitrust Division's Criminal Enforcement Program. "Collusion related to automotive parts was global in nature as are our efforts to hold responsible companies and individuals accountable for the resulting harm to U.S. consumers and businesses."
According to the charge, Bosch and others participating in the scheme conspired through meetings and conversations in which they discussed and agreed upon bids and price quotations on bids to be submitted to certain automobile and internal combustion engine manufacturers and to allocate the supply of the products to those manufacturers. Bosch, which manufactures and sells numerous automotive and internal combustion engine parts, sold spark plugs, oxygen sensors and starter motors at non-competitive prices to customers in the United States and elsewhere in furtherance of the agreement.
A spark plug is an internal combustion engine component for delivering high electric voltage from the ignition system to the combustion chamber. Oxygen sensors are located in the exhaust system and measure the amount of oxygen in the exhaust. Starter motors are small electric motors used in starting internal combustion engines.
The charge against Bosch is the latest in the department's on-going investigation into anticompetitive conduct in the automotive parts industry. Bosch is the third European-based company charged in this investigation.
Including Bosch, 34 companies and 29 executives have pleaded guilty or agreed to plead guilty in the division's ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of nearly $2.5 billion in criminal fines.
Bosch is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty 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.
Today's charge 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 the Antitrust Division's criminal enforcement sections and the FBI. Today's charge was brought by the Antitrust Division's Washington Criminal I Section and the FBI's Detroit Field Office with the assistance of the FBI Headquarters' International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division's Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI's Detroit Field Office at 313-965-2323.
Robert Bosch GmbH, the world's largest independent parts supplier to the automotive industry, based in Gerlingen, Germany, has agreed to plead guilty and to pay a $57.8 million criminal fine for its role in a conspiracy to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automobile and internal combustion engine manufacturers in the United States and elsewhere, the Department of Justice announced today.
According to the one-count felony charge filed today in the U.S. District Court of the Eastern District of Michigan, Bosch conspired to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of, spark plugs and oxygen sensors sold to automobile and internal combustion engine manufacturers such as DaimlerChrysler AG, Ford Motor Company, General Motors Company and Andreas Stihl AG & Co., among others, in the United States and elsewhere. Bosch's involvement in the conspiracy lasted from at least as early as January 2000 until at least July 2011. Bosch is also charged with participating in a conspiracy to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of, starter motors sold to Volkswagen AG and certain of its subsidiaries in the United States from at least as early as January 2009 until at least June 2010. Bosch has agreed to cooperate in the department's ongoing investigation. The plea agreement will be subject to court approval.
"The participants in this conspiracy were not located in just one country or region of the world," said Deputy Assistant Attorney General Brent Snyder of the Antitrust Division's Criminal Enforcement Program. "Collusion related to automotive parts was global in nature as are our efforts to hold responsible companies and individuals accountable for the resulting harm to U.S. consumers and businesses."
According to the charge, Bosch and others participating in the scheme conspired through meetings and conversations in which they discussed and agreed upon bids and price quotations on bids to be submitted to certain automobile and internal combustion engine manufacturers and to allocate the supply of the products to those manufacturers. Bosch, which manufactures and sells numerous automotive and internal combustion engine parts, sold spark plugs, oxygen sensors and starter motors at non-competitive prices to customers in the United States and elsewhere in furtherance of the agreement.
A spark plug is an internal combustion engine component for delivering high electric voltage from the ignition system to the combustion chamber. Oxygen sensors are located in the exhaust system and measure the amount of oxygen in the exhaust. Starter motors are small electric motors used in starting internal combustion engines.
The charge against Bosch is the latest in the department's on-going investigation into anticompetitive conduct in the automotive parts industry. Bosch is the third European-based company charged in this investigation.
Including Bosch, 34 companies and 29 executives have pleaded guilty or agreed to plead guilty in the division's ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of nearly $2.5 billion in criminal fines.
Bosch is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty 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.
Today's charge 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 the Antitrust Division's criminal enforcement sections and the FBI. Today's charge was brought by the Antitrust Division's Washington Criminal I Section and the FBI's Detroit Field Office with the assistance of the FBI Headquarters' International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division's Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI's Detroit Field Office at 313-965-2323.
By Chris Bruce
See also: Foreign automakers pay from $38 to $65 per hour to non-union workers, Detroit 3 and UAW set for showdown over tiered wages, Detroit 3 and UAW set for showdown over tiered wages.