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CADE’s General Superintendence investigates an international cartel of airbags, seat belts and steering wheels

Auto parts

Five companies and 29 foreign individuals are being investigated
by Assessoria de Comunicação Social published: Jun 05, 2017 04:34 PM last modified: Jun 05, 2017 04:34 PM

The General Superintendence of the Administrative Council for Economic Defense – CADE initiated, on 2 June 2017, an Administrative Proceeding to investigate an alleged international cartel, with effects in Brazil, in the market of airbag modules, seat belts and steering wheels (Administrative Proceeding 08700.002938/2017-35).

The five companies under investigation are Autoliv Inc., Takata Corporation, ZF TRW Active & Passive Safety Technology Division, Tokai Rika Co, Ltd. and Toyoda Gosei Co., Ltd. According to a technical note of CADE’s General Superintendence, there is evidence that these companies may have fixed prices and commercial conditions engaging in cover pricing and jointly establishing level prices and discount percentages granted to car manufacturers.

Moreover, there is evidence that the companies agreed to divide the market, allocating new business opportunities (sourcings) and/or complying with the deals already established by each company (resourcings). In addition, the companies might have shared with each other commercially sensitive information, such as prices, volumes and production capacity.  

According to the General Superintendence, it seems that at least 29 individuals, linked to the companies, were implicated in the cartel, carrying out this anticompetitive practice through e-mails, telephone calls and face-to-face meetings between at least 2005 and 2011.

After the initiation of the Administrative Proceeding, the defendants will be notified in order to present their defenses. Once the initiation phase is concluded, the General Superintendence will issue an opinion and forward the case to CADE’s Tribunal, which is responsible for the final decision.

Other investigations in the sector

Between 2014 and 2017, the General Superintendence initiated ten other Administrative Proceedings to investigate cartels related to the auto parts market. The investigated cartels were in the following markets: spark plugs (Administrative Proceeding 08700.005789/2014-13); anti-friction bearings (Administrative Proceeding 08012.005324/2012-59); clutch facings (Administrative Proceeding 08700.010321/2012-89); thermal systems – that includes radiators, capacitors and heating systems, ventilation and air conditioning (Administrative Proceeding 08700.010323/2012-78); windshield wipers (Administrative Proceeding 08700.010320/2012-34); safety devices for automobiles – such as safety bells, airbags and steering wheels (Administrative Proceeding 08700.004631/2015-15); dampers (Administrative Proceeding 08700.004629/2015-38); ceramic substrates for automobiles (Administrative Proceeding 08700.009167/2015-45); and automotive spare parts (Administrative Proceeding 08700.006386/2016-53).

Four other markets have already been investigated by means of dawn raids conducted by the General Superintendence in August 2014, and may still result in the initiation of new Administrative Proceedings. The relevant markets of these cases are: automotive lighting (headlights, lanterns and brake lights); emergency switches (hazard lights and turning signal); access mechanism (cylinders kits, handles, locks and steering locks); and automotive clutches markets. In addition, there are other ongoing investigations in the auto parts sector.