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Antitrust Matters Emerge in European Community

Automotive electronics pricing at suppliers is under scrutiny.

by on Feb.26, 2010

“Lear is cooperating fully with the European Commission..."

Lear Corporation has just reported that it is part of an investigation into anti-competitive practices among automotive electrical and electronic component suppliers by the European Commission.

The EU Commission said it was investigating several suppliers, but so far, only Lear and Leoni Kabel Gmbh of Roth, Germany, have acknowledged they are part of the ongoing investigation.

Japan’s Fair Trade Commission has raided offices of Sumitomo Electric Industries Ltd. and Furukawa Electric Company.

“Lear is cooperating fully with the European Commission in their investigation, and I am confident that our Company is not involved in any anti-competitive practices,” said Bob Rossiter, Lear’s chairman and chief executive officer.
The antitrust investigations are looking at whether the companies improperly divided business with automakers, the EC statement said.

“The commission has reason to believe that the companies concerned may have violated [European Union] antitrust rules that prohibit cartels and restrictive businesses practice,” the EC said.

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Earlier this week the Federal Bureau of Investigation and U.S. Department of Justice also appeared unannounced and uninvited at the offices of three different Japanese automotive suppliers in the Detroit area, raising questions about whether the investigation was triggered by complaints from automakers.  

Among the company’s targeted were Denso Corporation, maker of Toyota accelerator pedals, and one of the world’s largest producers of automotive components and a member of the Toyota Motor keiretsu, a closely-linked network of cross-held companies that characterizes the way the auto industry operates in Japan.

Also raided were Yazaki North America and Tokai Rika.

The Department of Justice statement said the raids were part of a wider investigation into price fixing of electronic components, which raised more question than it answered.
“The antitrust division is investigating the possibility of anti-competitive cartel conduct of automotive electronic component suppliers,” Gina Talamona, a DOJ spokewoman said.

“We are coordinating with the European Commission and other foreign competition authorities,” she said.

The anti-trust division usually acts only after a company complains about unfair practices by a competitor or competitors. It also tends to move slowly and deliberately, which suggests the raids were in the works before the controversy over Toyota’s recalls created headlines around the world.

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