Action against global car cartel

Autoliv’s 2.5% turnover fine

ACTION has commenced in South Africa against a global automotive component cartel, with the Competition Tribunal yesterday confirming a settlement agreement in terms of which multinational component supplier Autoliv agreed to pay a fine of R149.96 million.

But Anthony Ndzabandzaba, appearing for the Competition Commission at the tribunal hearing, stressed the Autoliv case was “just the tip of the iceberg”.

“There is more that is coming. These were global tenders that had an effect in South Africa. We are all satisfied that the South African consumer has been adversely affected by this conduct and it needs to be outed,” he said.

The tribunal confirmation of Autoliv’s settlement agreement coincided with an European Commission antitrust commission announcement that it had fined five car safety equipment suppliers, including Autoliv, a total of €34m for breaching EU antitrust rules.

Lars Sjöbring, the general counsel at Autoliv, confirmed at South Africa’s tribunal hearing there had been a global investigation of automotive products, not only occupant safety products.

Sjöbring confirmed Autoliv had settled with the Department of Justice in the US and Brazil.

Agreement

He said the instances that were dealt with in Autoliv’s consent agreement with the Competition Commission involved sales people based in Europe, who worked directly with customers.

“They were sales executives, so mid-level management, and in some cases senior mid-level management, but there have not been executives implicated in negotiations with competitors.

“There are people who have left the company as a result of this. We also in the US had one Japanese citizen who settled his own criminal liability and he spent one year in prison,” he said.

Autoliv, one of the world’s largest manufacturers of airbags, seat belts and steering wheels and has a manufacturing plant in Durban to supply locally-based vehicle manufacturers.

It admitted in its settlement agreement that it had engaged in prohibited anti competitive practices, including price fixing, market division and collusive tendering and/or the exchange of commercially sensitive information with its competitors.

Leniency applicant

These competitors were TRW Automotive, the corporate leniency applicant in this case, Takata Group, Toyoda Gosei Co and Tokai Rika.

The conduct in the Autoliv case involved tenders issued by BMW and VW for the manufacture and supply of airbags, seat belts and steering wheels.

Models affected by these practices included VW Polo; the VW Golf platform; Audi A1, A3, A6, A7, A8 and Q3; VW 120Up; VW Eos convertible; Passat; Porsche Cajun/Macan; the platforms that produce the BMW X5, X6, 5-Series, 6-Series and 7-Series; and M Sport.

Ndzabandzaba said Autoliv had been fined 2.5 percent of its 2015 annual turnover in South Africa on each of 12 contraventions.

Daryl Dingley, the legal representative for Autoliv, said the total cumulative penalty to be paid by Autoliv was more than 10 percent of the company’s gross annual turnover in South Africa in that financial year.

Ndzabandzaba said this was the first time the commission had gone as high as 2.5 percent per contravention at the settlement stage.

“This reflects the manner in which the commission is now upping the ante in regard to the penalisation of cartel conduct,” he said.

Ndzabandzaba said Autoliv had been extremely co-operative in assisting the commission with its investigation despite not being a leniency applicant.