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CADE’s General Superintendence investigates cartel in the automotive spare parts’ market

Administrative Proceeding

Three companies would have participated in the colluding that affected the supply chain of piston engine, bearings, and associated parts
by Assessoria de Comunicação Social published: Dec 07, 2017 11:45 AM last modified: Dec 07, 2017 11:45 AM

The General Superintendence of the Administrative Council for Economic Defense – CADE has initiated, on 4 December, the Administrative Proceeding 08700.006065/2017-30 in order to investigate a cartel in the Aftermarket and in the Original Equipment Manufacturer markets. The alleged anticompetitive conduct would have affected the supply chain of the following automotive parts: engine pistons, bearings, pins, connecting rods, ring carriers, rings and sealing gaskets and pistons engine rings.  

The three companies under investigation are Federal Mogul Sistemas Automotivos Ltda., Mahle Metal Leve S/A; and KSPG Automotive Brazil. According to the Technical Note that substantiated the initiation of the investigations, there is evidence that these companies fixed prices and commercial conditions in the Aftermarket sales, combining to fix rates and dates for readjustments. In the Original Equipment Manufacturer market, the companies would have allegedly divided clients and agreed on prices and commercial conditions. Furthermore, they would have exchanged information considered sensitive commercial and competitively both in the Aftermarket and in the Original Equipment Manufacturer market.

According to the General Superintendence, the practices would have been implemented, by means of face-to-face meetings, telephonic contacts, and e-mail, between 2004 and May 2012, involving at least 26 individuals related to the companies.

After the initiation of the Administrative Proceeding, the defendants will be notified in order to present their defenses. At the conclusion of the investigation, the General Superintendence will issue an opinion and forward the case to CADE’s Administrative Tribunal, responsible for issuing the final decision.

Investigations in the sector

Between 2014 and 2017, the General Superintendence has initiated thirteen administrative proceedings in order to investigate cartels in the auto parts sector. The investigated cartels in  the auto parts’ markets include sparking 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, including radiators, capacitors, and heating, ventilation and air conditioning systems (Administrative Proceeding 08700.010323/2012-78); windshield wipers (Administrative Proceeding 08700.010320/2012-34); safety devices, such as seat belts, airbags and steering wheels (Administrative Proceeding 08700.004631/2015-15); dampers (Administrative Proceeding 08700.004629/2015-38); ceramic substrates (Administrative Proceeding 08700.009167/2015-45); automotive spare parts (Administrative Proceeding 08700.006386/2016-53); exhaust systems and their components (Administrative Proceeding 08700.001486/2017-74); airbag modules, seat belts and steering wheels (Administrative Proceeding 08700.002938/2017-35); valve for engines, valve guides and valve seats (Administrative Proceeding 08700.002904/2017-41); and automotive filters (08700.003340/2017-63).

The General Superintendence has also conducted dawn raids in August 2014 related to additional four markets, which still may be object of the administrative proceedings. These specific markets are: automotive lighting (headlights, lanterns and brake lights); emergency switches (hazard lights and arrow keys); access mechanism (cylinders sets, handles, locks and steering locks); and automotive clutches.