Recent U.S. and international antitrust developments will have important implications in 2015 for the automotive industry. U.S. antitrust developments include, in particular:

  1. The ongoing antitrust investigations and civil damage litigation involving the auto parts industry;
  2. Ever-increasing pressure for effective legal compliance programs; and
  3. Challenges to mergers (large and small, non-reportable) underscoring continued tough and aggressive enforcement of the merger laws.

In the international sector, important developments include:  

  1. EU enactment of  legislation that would facilitate private antitrust actions throughout the EU and collective redress of damages through class actions;
  2. efforts to eradicate cartel activity have increased exponentially, particularly in the automotive parts sector; and
  3. European Commission’s emphasis on “competitive effect” requirement as predicate to a violation.

On the criminal front, U.S. Department of Justice Antitrust Division continues its broad and aggressive criminal antitrust investigation of the auto parts industry. The investigations have, so far, resulted in guilty pleas from dozens of companies and many more individuals who have pled guilty, caught up in an ever-widening series of price-fixing conspiracies. Fines and incarcerations continue to increase, breaking records in size and severity. The DOJ has used its leniency and leniency plus programs effectively, as leverage, to expand its enforcement net. Massive class action treble damage litigations are pending in which billions of dollars in damages for overcharges are sought.

In terms of mergers, the FTC and the DOJ, which share merger enforcement responsibility, continue to investigate and challenge not only large and well publicized deals but also small, unreportable deals that raise serious enforcement concerns. Indeed, enforcement agencies increasingly challenge small, non-reportable transactions, even years after consummation, if the acquisitions raised significant anticompetitive risks for the markets involved. Almost 25% of all recent DOJ/FTC merger investigations involve non-HSR reportable transactions. Many of those investigations of non-reportable transactions resulted in enforcement actions to challenge the deal, even if previously consummated. More challenges should be anticipated in 2015. 

These high-profile criminal and civil enforcement campaigns mandate that companies adopt comprehensive and effective legal compliance programs. Failure to adopt comprehensive compliance programs can has dire results, including enhanced fines, probation and even a court-appointed monitor. Effective compliance program has three principal goals:  prevention, detection, and mitigation. To be effective, the program must be “top down” creating a “culture of compliance.” It must be company-wide, proactive, emphasize training, accountability and discipline.

On the international front, the EU has adopted  legislation (a “directive”) that requires all EU member states in the next several years to enact national laws that facilitating persons injured by violations of EU antitrust laws (e.g., cartels and abuses of dominant positions) to recover damages for their injuries. The directive includes required steps to harmonize and liberalize current national rules on damage actions, particularly with regard to discovery of evidence, statutes of limitations, measure of damages, consensual settlements, and presumptive effects of national determinations of injury. There is also a parallel effort to establish an EU-wide system of “collective redress.” The EU Court of Justice has expanded the scope of recoverable damages. These developments reflect the increasing priority to redress the perceived on-going failure of the EU member states to protect persons injured from antitrust violations. The result will likely be additional exposure to damage actions for violation of European competition laws.

Like in the United States, EU cartel prosecution remains a high enforcement priority. While EU competition rules are not criminal, the EU Commission has used its sweeping powers to detect, investigate, and prohibit cartel activity. Through December 10, 2014, the European Commission has imposed €1.689b in fines and penalties in cartel cases. The EU has an aggressively enforced system of leniency and leniency-plus. Like the U.S. Department of Justice, the EU provides incentivize “whistle-blowers” to alert the Commission to cartel activity. The Commission regularly engages in so-called “dawn raids” to gather evidence from company records. Again, like the United States, the European Commission actively cooperates with other enforcement agencies to further strengthen its enforcement leverage. The European Commission is actively pursuing investigations in the auto parts industry. When the new European Commission took office on November 1, 2014, the out-going Competition Commissioner said that there was a “long list” of investigations being turned over to the in-coming commissioner including investigations involving more than 6 auto part components industries.   

2015 should be a very active year of antitrust matters in the automotive industry.