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PANASONIC AND ITS SUBSIDIARY SANYO AGREE TO PLEAD GUILTY IN SEPARATE PRICE-FIXING CONSPIRACIES INVOLVING AUTOMOTIVE PARTS AND BATTERY CELLS

WASHINGTON — Panasonic Corp. and its subsidiary, SANYO Electric Co. Ltd.,  have agreed to plead guilty and to pay a total of $56.5 million in criminal  fines for their roles in separate price-fixing conspiracies involving automotive parts and battery cells, the Department of Justice announced  today.  LG Chem Ltd., a leading  manufacturer of secondary batteries, has agreed to plead guilty and to pay a  $1.056 million criminal fine for price fixing involving battery cells.

Osaka, Japan-based Panasonic agreed to pay a $45.8 million criminal  fine for its role in the automotive parts conspiracy. SANYO agreed to pay a  $10.731 million criminal fine for its role in the battery cells conspiracy.  The guilty pleas against SANYO and LG Chem  are the first in the department’s ongoing investigation into anticompetitive  conduct in the cylindrical lithium ion battery cell industry.

The three-count felony charge against Panasonic was filed in U.S.  District Court for the Eastern District of Michigan.  Separate one-count felony charges were filed  against SANYO and LG Chem in U.S. District Court for the Northern District of  California.  As part of the plea  agreements, which are subject to court approval, the charged companies have  agreed to cooperate in the department’s ongoing antitrust investigations.

Panasonic has agreed to plead  guilty for its role in a conspiracy to fix prices of switches, steering angle sensors and automotive high intensity discharge (HID) ballasts installed in  cars sold in the United States and elsewhere.   SANYO and LG Chem Ltd. have agreed to plead guilty for their roles in a  conspiracy to fix the prices of cylindrical lithium ion battery cells sold  worldwide for use in notebook computer battery packs.

“Panasonic is charged with participating in separate price-fixing  conspiracies affecting numerous parts used in cars made and sold in the United  States while its subsidiary was also fixing prices on battery cells used by  consumers of notebook computers,” said Scott D. Hammond, Deputy Assistant  Attorney General for the Antitrust Division’s criminal enforcement program.  “Pleading guilty and cooperating with the  division’s ongoing investigations is a necessary step in changing a corporate culture that turned customers into price-fixing victims.”

According  to the first count of a three-count felony charge filed today in U.S. District  Court for the Eastern District of Michigan in Detroit, Panasonic participated  in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices  of steering wheel switches, turn switches, wiper switches, combination switches  and door courtesy switches sold to Toyota Motor Corp. and Toyota Motor  Engineering & Manufacturing North America Inc. in the United States and  elsewhere. According to the court document, Panasonic and its co-conspirators  carried out the conspiracy from at least as early as September 2003 until at  least February 2010.

The  second count charges that Panasonic, during this same time period, participated  in a conspiracy to rig bids for, and to fix, stabilize,  and maintain the prices of steering angle sensors sold to Toyota in the United  States and elsewhere. The department said that Panasonic and its  co-conspirators agreed, during meetings and conversations, to suppress and  eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix,  stabilize, and maintain the prices of steering angle sensors sold to Toyota  Motor Corp. and Toyota Motor Engineering & Manufacturing North America Inc.  in the United States and elsewhere.

According  to the third count of the charge, from at least as early as July 1998 and  continuing until at least February 2010, Panasonic and its co-conspirators  participated in a conspiracy to suppress and eliminate competition in the  automotive parts industry by agreeing, during meetings and conversations, to rig bids for, and to fix,  stabilize, and maintain the prices of automotive HID ballasts sold to Honda  Motor Co. Ltd. and American Honda Motor Co. Inc., Mazda Motor Corp. and Mazda  Motor of America Inc., and Nissan Motor Co. Ltd. and Nissan North America Inc.  in the United States and elsewhere.

Including Panasonic, 11 companies and 15 executives have pleaded  guilty or agreed to plead guilty and have agreed to pay a total of more than  $874 million in criminal fines as a result of the auto parts investigation. Additionally, 12 of the individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. The three additional executives have agreed to serve time in prison and are currently awaiting sentencing.

“The FBI remains committed to protecting American consumers and  businesses from corporate corruption. The conduct of Panasonic, SANYO, and LG Chem  resulted in inflated production costs for notebook computers and cars purchased  by U.S. consumers,” said Joseph S. Campbell, FBI Criminal Investigative Division Deputy Assistant Director.  “These investigations illustrate our efforts to ensure market fairness for U.S. businesses by bringing corporations to justice when their commercial activity violates antitrust laws.”

According to the one-count felony charge  filed today in the U.S. District Court for the Northern District of California  in San Francisco, SANYO and LG Chem engaged in a conspiracy to fix the price of the cylindrical lithium ion battery cells used in notebook computer battery packs from about April 2007 until about September 2008. Cylindrical  lithium ion battery cells are rechargeable batteries that are often incorporated in groups into more powerful battery packs commonly used to power electronic devices.

According to the charges, SANYO, LG Chem and  their co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and conversations to price cylindrical lithium ion  battery cells for use in notebook computer battery packs to customers at  predetermined levels and issuing price quotations to customers in accordance  with those agreements. The department also said that SANYO, LG Chem and their  co-conspirators collected and exchanged information for the purpose of  monitoring and enforcing adherence to the agreed-upon prices and took steps to  conceal the conspiracy.

Panasonic, SANYO and LG Chem are each charged with price fixing in  violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine for the company may be  increased to twice the gain derived from the crime or twice the loss suffered  by the victims, if either of those amounts is greater than the statutory  maximum fine.

Today’s charges arose from an ongoing  investigation in the cylindrical lithium ion battery cells industry being  conducted by the Antitrust Division’s San Francisco Office and the FBI in San  Francisco as well as an ongoing federal antitrust investigation into  price fixing, bid rigging and other anticompetitive conduct in the automotive  parts industry, which is being conducted by each of the Antitrust Division’s  criminal enforcement sections and the FBI. Today’s automotive parts charges  were brought by the Antitrust Division’s National Criminal Enforcement Section  and the FBI’s Detroit Field Office, with the assistance of the FBI  headquarters’ International Corruption Unit. Anyone with information on price  fixing, bid rigging and other anticompetitive conduct related to other products  in the automotive parts industry should contact the Antitrust Division’s  Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323. Anyone  with information concerning illegal or anticompetitive conduct in the battery industry is urged to call the Antitrust Division’s San Francisco Office at  415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.