Category Archives: Antitrust Division

A Report Card: “Obama Administration Antitrust Policy:

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Brief Summary of “Obama Administration Antitrust Policy: A Report Card” Program

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On January 29, 2015 I attended a program hosted by the Heritage Foundation: Obama Administration Antitrust Policy: A Report Card. The program was free and held in the Allison Auditorium. The program had three panels that focused on 1) the FTC; 2) the DOJ, and 3) Antitrust Abroad.   The panels were outstanding and included speakers who were either current or former senior members of the FTC or the Antitrust Division.

The consensus of the speakers was that it is too early to give an overall Antitrust grade to the Obama administration. It can take years to conduct a proper retrospective of how decisions and priorities have played out. Overall, however, there were a number of “high marks” or “good job” given by each of the panels. The DOJ, however was given one failing grade for (my words) “Plays Well With Others.”  Typically when a new administration takes over, new management speaks well of their predecessors, even though they may have a different approach in some areas. This happened with the Bush to Obama transition at the FTC. It did not at the DOJ. Several panelists noted Obama administration DOJ officials were uncharacteristically critical of their immediate predecessors with remarks such as the “antitrust is open for business”[1] and comments made when, in May 2009, the new administration withdrew the September 2008 Section 2 report on monopolization.

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OCEAN SHIPPING EXECUTIVE PLEADS GUILTY TO PRICE FIXING ON

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Executive Agrees to Serve 18 Months in U.S. Prison

WASHINGTON — An executive of Japan-based Kawasaki Kisen Kaisha Ltd. (K-Line) pleaded guilty today and was sentenced to 18 months in a U.S. prison for his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today.

According to the one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, Hiroshige Tanioka, who was at various times an assistant manager, team leader and general manager in K-Line’s car carrier division, conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. Tanioka participated in the conspiracy from at least as early as April 1998 until at least April 2012.

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and off of an ocean-going vessel.  Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.

“For more than a decade this conspiracy has raised the cost of importing cars and trucks into the United States,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.  “Today’s sentencing is a first step in our continuing efforts to ensure that the executives responsible for this misconduct are held accountable.”

Today’s sentence was the first to be imposed against an individual in the division’s ocean shipping investigation.  Previously, three corporations have agreed to plead guilty and to pay criminal fines totaling more than $136 million, including Tanioka’s employer K-Line, which was sentenced to pay a criminal fine of $67.7 million in November 2014.

Pursuant to the plea agreement, which was accepted by the court today, Tanioka was sentenced to serve an 18-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy.  In addition, Tanioka has agreed to assist the department in its ongoing investigation into the ocean shipping industry.

Tanioka was charged with a violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s plea agreement is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.

3C’s: LIBOR Guest Post from Richard Wolfram, Esq.

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I came across a very informative post by Richard Wolfram, Esq. about antitrust standing the LIBOR civil damages litigation.  I thought it would be of interest to Cartel Capers readers, in case you haven’t seen it elsewhere.  Mr. Wolfram kindly agreed to let me repost this.

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In re LIBOR: ‘More Light, Please!’—Questions and Observations As the Decision Dismissing Antitrust Claims for Lack of Antitrust Injury Now Faces Appellate Review
Posted: 28 Jan 2015 10:01 AM PST
by Richard Wolfram, Esq.

(An in-depth article on In re LIBOR and antitrust injury is available here under this title. The following is a preview of my article).

(N.B.: In a coincidence of timing, on Jan. 28, 2015, the date of this posting and publication of the linked article, Judge Lorna Schofield of the federal district court for the Southern District of New York, in a case alleging a conspiracy to manipulate the benchmark rates in the $5.3 trillion/day foreign exchange market, denied the defendants’ motions to dismiss and expressly rejected the test used by the court in In re LIBOR for determining antitrust injury, discussed below. In re Foreign Exchange Benchmark Rates Antitrust Litigation (S.D.N.Y. 1/28/15).)

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Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure Auctions

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Two Georgia real estate investors pleaded guilty today for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta.  According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia.  Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012.  Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.  “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Gwinnett County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office.  “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

SANDEN CORP. AGREES TO PLEAD GUILTY TO PRICE FIXING ON AUTOMOBILE PARTS INSTALLED IN U.S. CARS

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Company Agrees to Pay $3.2 Million Criminal Fine

WASHINGTON — Sanden Corp., an automotive parts manufacturer based in Gunma, Japan, has agreed to plead guilty and to pay a $3.2 million criminal fine for its role in a conspiracy to suppress and eliminate competition for the purchase of compressors used in air conditioning systems sold to Nissan North America Inc. for installation in vehicles manufactured and sold in the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Sanden conspired to fix the prices of compressors sold to Nissan.  In addition to the criminal fine, Sanden has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Today’s charge is the latest in the Antitrust Division’s ongoing investigation of automobile parts suppliers,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”

The department said that Sanden and its co-conspirator held meetings and conversations to discuss and agree upon the bids and price quotations submitted to Nissan for the purchase of compressors used in automotive air conditioning systems.  Sanden’s involvement in the conspiracy lasted from as early as August 2008 until at least April 2009.

Including Sanden, 33 companies and 50 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the automotive parts industry.  All of the charged companies have pleaded guilty or have agreed to plead guilty and to pay a combined total of more than $2.4 billion in fines.

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

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s New York Office and the FBI’s New York 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 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 New York Field Office at 212-384-1000.

3C’s: Antitrust Division Announces FY 2014 Criminal Fine Total

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Antitrust Division Announces FY 2014 Criminal Fine Total

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The Antitrust Division just issued a press release announcing that it collected $1.861 billion in criminal fines for its fiscal year that ended Sept. 30, 2014.  The highlights are that four companies paid fines in excess of $100 million (the Sherman Act maximum), led by the $425 million fine against Bridgestone Corp.   The full press release is below:

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FOR IMMEDIATE RELEASE AT
THURSDAY, JANUARY 22, 2015 (202) 514-2007
WWW.JUSTICE.GOV TTY (866) 544-5309

ANTITRUST DIVISION ANNOUNCES FISCAL YEAR TOTAL
IN CRIMINAL FINES COLLECTED

The Department of Justice collected $1.861 billion in criminal fines and penalties resulting from Antitrust Division prosecutions in the fiscal year that ended on Sept. 30, 2014.

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3C’s: India Update 2015, Volume 1.

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India Update 2015, Volume 1.

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Today’s post is the first in 2015 from my friend in India, Avinash Amarath.

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I wish all readers of Cartel Capers a very happy and prosperous new year. There are two items to report for the first India post of the New Year.

Film Distributor Trade Association fined for price fixing and collective boycott

In its last reported decisions of 2014, the Competition Commission of India (CCI), in two separate cases, fined the Film Distributors Association of Kerala (a state in India) 5% of its turnover (in each case) for indulging in price fixing and collective boycott respectively. The business chain for films in India broadly comprises producers, distributors and exhibitors (i.e. cinema halls and multiplexes).

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3C’s: EU Competition Policy Brief–The Damages Directive

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EU Competition Policy Brief–The Damages Directive

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Last week Cartel Capers featured a post from James Musgrove and Joshua Chad, What Fresh Hell Is This: The Canadian Cartel Class Action System.  I wanted to follow up that post with an update on collective redress in Europe. On November 26, 2104 the European Parliament adopted certain rules governing actions for damages under national law for infringement of the competition law provisions of the Member States and of the European Union. The “Damages Directive” was published on December 5, 2014 and EU countries need to implement it by December 27, 2016. The aim of the Directive is more efficient enforcement of the EU competition rules by making it easier for victims of antitrust violations to claim compensation. While larger companies already often obtain redress for price-fixing overcharges in Europe, the Directive aims to make recovery a realistic options for smaller companies and consumers.

For more information see the EU Competition Policy Brief—The Damages Directive, January 2015.

Thanks for reading.

3C’s: What Fresh Hell is This? The Canadian Cartel Class Action System

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What Fresh Hell is This? The Canadian Cartel Class Action System

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In Canadian Cartel News Volume 6, James Musgrove and Joshua Chad of McMillan LLP discuss the Canadian class action system.

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The answer to Miss Parker’s question, for those in the midst of a cartel investigation, is, almost certainly, a follow-on class action claim. In this volume of Cartel Capers we aim to give a rough and ready overview of the class action system for cartel cases in Canada. A book could be written on this subject – some have been – so these are merely the highest of lights.

The first point to note is that what used to be called follow-on class actions (that is, follow-on after a criminal conviction) is now a misnomer. Like in the US, these are now parallel or even precursor class actions. The merest hint of a cartel investigation results in the filing of class action applications.

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Executive of Japanese Automotive Parts Manufacturer Indicted for Role in Conspiracy to Fix Prices

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A Detroit federal grand jury returned a one-count indictment against an executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.

The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Hiromu Usuda, an executive at Takata Corp., with conspiring to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles manufactured and sold in the United States and elsewhere.  Usuda served as Group and Department Manager in the Customer Relations Division at Takata, from January 2005 until at least February 2011.

“Antitrust violators who refuse to accept responsibility for their crimes leave us no choice but to indict,” said Brent Synder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “We will continue to prosecute those that commit these crimes.”

The indictment alleges, among other things, that from at least Jan. 1, 2005, through at least February 2011, Usuda and others attended meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices of seatbelts sold to the automobile manufacturers.  It alleges that Usuda participated directly in the conspiratorial conduct and that he directed, authorized and consented to his subordinates’ participation.

Takata is a Tokyo-based manufacturer of automotive parts, including seatbelts.  Takata supplies automotive parts to automobile manufacturers in the United States, in part, through its U.S. subsidiary, TK Holdings Inc., located in Auburn Hills, Michigan.  Takata pleaded guilty on Dec. 5, 2013, for its involvement in the conspiracy, and was sentenced to pay a criminal fine of $71.3 million.  Four other executives from Takata have pleaded guilty, have been sentenced to serve time in a U.S. prison and to pay criminal fines for their roles in the conspiracy.

Including Usuda, 50 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 32 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.4 billion in fines.

Usuda is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by four of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Washington Criminal I 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 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.