Yazaki coordinated quotes with a competitor over the supply of wire harnesses for the Toyota Camry © Toyota
Yazaki coordinated quotes with a competitor over the supply of wire harnesses for the Toyota Camry © Toyota

Yazaki cartel penalty raised to $46m

Will Green is news editor of Supply Management
21 May 2018

Yazaki Corporation has been ordered to pay penalties totalling $46m after it engaged in anti-competitive cartel conduct in Australia.

Last year the firm was fined $9.5m by Australia’s Federal Court but the sum has been increased to the highest ever handed down under the Competition and Consumer Act, following an appeal by the Australian Competition and Consumer Commission (ACCC).

ACCC chairman Rod Sims said: “We appealed the penalties imposed by the trial judge because we considered that the original penalties of $9.5m were insufficient to adequately deter Yazaki or other businesses from engaging in cartel conduct in the future.”

In 2015 Yazaki was found by the Federal Court to have made arrangements with a competitor, including the coordination of quotes, over wire harnesses supplied to Toyota and used in the manufacture of the Camry. Wire harnesses supply power and electrical signals to various components.

“Cartel conduct is illegal because it not only cheats consumers and other businesses, it also restricts healthy economic growth,” said Sims. “For this reason it is of considerable importance that penalties imposed by the courts are large enough to act as a sufficient deterrent to prevent companies and their employees contravening Australia’s competition laws.”

The ACCC has reviewed penalties following an OECD report that showed average Australian fines in cartel cases would have to rise by 12.6 times to be comparable with the average in OECD countries.

The OECD found Australian fines were set by the Federal Court based on “instinctive synthesis” of various factors, whereas most OECD countries included an offending firm’s revenue in the methodology.

“We do not want breaches of our competition law to be seen as an acceptable cost of doing business,” said Sims. “We need penalties that will be large enough to be noticed by senior management and company boards, and also shareholders.”

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