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CADE’s General Superintendence investigates cartel in the market of safety devices for vehicles

Cartel

There is evidence of market division, price and commercial conditions fixing and exchange of sensitive information
published: Jul 06, 2015 09:00 AM last modified: Apr 28, 2016 01:10 PM

The General Superintendence of the Administrative Council for Economic Defense (CADE) opened, on 6 June 2015, Administrative Proceeding to investigate an alleged cartel in the national market of seat belts, airbags and steering wheels, which consist of safety devices for vehicles (Administrative Proceeding no. 08700.004631/2015-15). The investigated companies are Autoliv do Brasil Ltda. and Takata Brasil S/A.

According to the opinion issued by the General Superintendence, there is evidence that companies fixed prices and commercial conditions by means of non-competition agreements and fixing prices. Companies also refused the requests of vehicle manufacturers, in order to avoid price reductions.

Furthermore, there is strong evidence that Autoliv and Takata divided the market, trying to allocate the clients orders between them. Companies also would have exchanged information about prices, readjustments, production data and, in some cases, turnover data.

According to the Superintendence, all these conducts were conducted by at least 13 individuals related to the companies. The goal was to keep or artificially increase the prices of the products. This undermined the intention of the vehicle manufacturers to reduce costs, thereby having the capacity to influence in the vehicles’ prices to the final consumers.

The practices would have been implemented through exchange of emails, telephone calls, and face-to-face meetings in the companies’ headquarters, bars and restaurants. The anticompetitive conducts would have possibly occurred between 2002 and 2011.

In 2014 and 2015, the General Superintendence opened other six Administrative Proceedings to investigate cartels in the market of different auto parts, including the segments of spark plugs (Administrative Proceeding no. 08700.005789/2014-13), anti-friction bearings (Administrative Proceeding no. 08012.005324/2012-59), clutch coats (Administrative Proceeding no. 08700.010321/2012-89), windshield wipers (Administrative Proceeding no. 08700.010320/2012-34), and thermal systems including radiators, condensers, and heat, ventilation and air conditioning systems (Administrative Proceeding 08700.010323/2012-78).

Four other markets were already object of search and seizure warrants carried out by the Superintendence in August of 2014, which still can result in the opening of new Administrative Proceedings. They are related to vehicle lighting (headlights and brake lights), emergency switches (hazard lights and turn signals); access mechanisms (roll sets, handles, locks and steering locks) and vehicle clutches. There are also other ongoing investigations in the sector of auto parts.

With the opening of the Administrative Proceeding this Monday, the indicted parties will be notified to present their defenses. At the end of the evidentiary stage, CADE’s General Superintendence will issue an opinion either on the condemnation or the filling and will submit the case for trial by CADE’s Tribunal, which is responsible for the final decision.