End of the road for cartels

Dawn raids have been carried out by the European Commission over the past two weeks at the premises of a number of companies involved in the production of electrical components for cars.    

Raids throughout Europe at the offices of Leoni AG and SY Systems Technologies GmbH (a joint venture between Yazaki and Continental AG) were conducted with the co-operation of anti-trust authorities in the United States where the FBI raided the offices of Yazaki North America, Dense International and Tokai Rita. In Japan, the offices of Yazaki, Sumitomo Electric Industries Ltd and Furukawa Electric Co, all of which are automotive parts suppliers associated with Toyota Motor Corp, were raided. The companies are all involved in the production of wire harnesses used to bundle the cables and wires that distribute power in a car.

It is thought that the companies have been engaged in illegal price fixing agreements to limit competition. If found guilty, the European Commission, which has a reputation for imposing the largest fines of any anti-trust authority in the world, can fine the companies up to 10% of their global annual turnover, although companies that co-operate with the Commission and provide information relating to the cartel can qualify for reduced fines. Investigations into cartel activities can take over a year depending on the complexity of the case and the amount of co-operation the Commission receives from the companies involved. This absorbs significant company resources and can put a serious strain on business activity.