United States v. Denso Corporation · DENSO Corporation ("Defendant") is a corporation organized...

USDOJ: Antitrust Division : U.S. v. Denso Corporation

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2:12-cr-20063-GCS-PJK Doc # 9 Filed 03/05/12 Pg 1 of 22 Pg ID 21






















2:12-cr-20063-DML-DRG Doc # 1 Filed 01/30/12 Pg 1 of 10 Pg ID 1

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES OF AMERICA,

v.

DENSO CORPORATION,

Defendant.

Case:2:12-cr-20063 . Judge: Lawson, ~avld M. MJ' Grand, Davld R. PM Fil~d: 01-30-2012 At 12:~~RPORA TION (KB) INFO: USA V. DENSO

Count I: 15 U.S.C. § 1 Count II: 15 U.S.C. § 1

----------------------------~/

INFORMATION

COUNT ONE CONSPIRACY TO RESTRAIN TRADE

(15 U.S.c. § 1)

THE UNITED STATES, ACTING THROUGH ITS ATTORNEYS, CHARGES:

Defendant and Co-Conspirators

1. DENSO Corporation ("Defendant") is a corporation organized and existing under

the laws of Japan with its principal place of business in Kariya, Japan. During the period

covered by this Count, Defendant was engaged in the business of manufacturing and selling

Electronic Control Units ("ECUs") and Heater Control Panels ("HCPs") to an automobile

manufacturer for installation in vehicles manufactured and sold in the United States and

elsewhere.

2. Various corporations and individuals, not made defendants in this Count,

participated as co-conspirators in the offense charged in this Count and performed acts and made

statements in furtherance of it.

3. Whenever in this Count reference is made to any act, deed, or transaction of any

corporation, the allegation means that the corporation engaged in the act, deed, or transaction by

or through its officers, directors, employees, agents, or other representatives while they were

actively engaged in the management, direction, control, or transaction of its business or affairs.

Background of the Offense

4. During the period covered by this Count, Defendant and its co-conspirators

supplied ECUs to an automobile manufacturer for installation in vehicles manufactured and/or

sold in the United States and elsewhere. During the period covered by this Count, Defendant and

its co-conspirators manufactured ECUs (a) in the United States for installation in vehicles

manufactured and sold in the United States, (b) in Japan for export to the United States and

installation in vehicles manufactured and sold in the United States, and (c) in Japan for

installation in vehicles manufactured in Japan for export to and sale in the United States.

5. An ECU is an embedded system that controls one or more of the electronic

systems or subsystems in a motor vehicle. When purchasing ECUs, the automobile

manufacturer issues Requests for Quotation ("RFQs") to automotive parts suppliers. Automotive

parts suppliers submit quotations, or bids, to the automobile manufacturer in response to RFQs.

Typically, the bidding process begins approximately three years prior to the start of production.

Japanese automobile manufacturers procure parts for U.S.-manufactured vehicles both in Japan

and the United States.

Conspiracy to Restrain Trade

6. From at least as early as January 2000 and continuing until at least February 2010,

the exact dates being unknown to the United States, Defendant and its co-conspirators

participated in a combination and conspiracy 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, ECUs sold to an automobile manufacturer in the United States and elsewhere. The

2


combination and conspiracy engaged in by Defendant and its co-conspirators was in

unreasonable restraint of interstate and foreign trade and commerce in violation of the Sherman

Antitrust Act, 15 U.S.C. § l.

7. The charged combination and conspiracy consisted of a continuing agreement,

understanding, and concert of action among Defendant and its co-conspirators, the substantial

terms of which were to rig bids for, and to fix, stabilize, and maintain the prices of, ECUs sold to

an automobile manufacturer in the United States and elsewhere.

Manner and Means of the Conspiracy

8. For purposes of forming and carrying out the charged combination and

conspiracy, Defendant and its co-conspirators did those things that they combined and conspired

to do, including, among other things:

a. participating in meetings, conversations, and communications in the

United States and Japan to discuss the bids and price quotations to be submitted to an

automobile manufacturer in the United States and elsewhere;

b. agreeing, during those meetings, conversations, and communications, on

bids and price quotations to be submitted to an automobile manufacturer in the United

States and elsewhere;

c. agreeing, during those meetings, conversations, and communications, to

allocate the supply ofECUs sold to an automobile manufacturer in the United States and

elsewhere on a model-by-model basis;

d. agreeing, during those meetings, conversations, and communications, to

coordinate price adjustments requested by an automobile manufacturer in the United


3


e. submitting bids, price quotations, and price adjustments to an automobile

manufacturer in the United States and elsewhere in accordance with the agreements

reached;

f. selling ECUs to an automobile manufacturer in the United States and

elsewhere at collusive and noncompetitive prices;

g. accepting payment for ECUs sold to an automobile manufacturer in the

United States and elsewhere at collusive and noncompetitive prices;

h. engaging in meetings, conversations, and communications in the United

States and elsewhere for the purpose of monitoring and enforcing adherence to the

agreed-upon bid-rigging and price-fixing scheme; and

i. employing measures to keep their conduct secret, including but not limited

to using code names and meeting at private residences or remote locations.

Trade and Commerce

9. During the period covered by this Count, Defendant and its co-conspirators sold

to an automobile manufacturer located in various states in the United States substantial quantities

of ECUs shipped from outside the United States and from other states in a continuous and

uninterrupted flow of interstate and foreign trade and commerce. In addition, substantial

quantities of equipment and supplies necessary to the production and distribution of ECU s sold

by Defendant and its co-conspirators, as well as payments for ECUs sold by Defendant and its

co-conspirators, traveled in interstate and foreign trade and commerce. The business activities of

Defendant and its co-conspirators in connection with the production and sale ofECUs that were

the subject of the charged conspiracy were within the flow of, and substantially affected,

interstate and foreign trade and commerce.

4


Jurisdiction and Venue

10. The combination and conspiracy charged in this Count was carried out, at least in

part, in the Eastern District of Michigan within the five years preceding the filing of this

Information.

COUNT TWO CONSPIRACY TO RESTRAIN TRADE

(15 U.S.C. § 1)

THE UNITED STATES, ACTING THROUGH ITS ATTORNEYS, CHARGES:

Defendant and Co-Conspirators

11. Each and every allegation contained in paragraphs 1 through 3 of Count One of

this Information is realleged and reasserted here as if fully set forth in this Count.

Background of the Offense

12. During the period covered by this Count, Defendant and its co-conspirators

supplied HCPs to an automobile manufacturer for installation in vehicles manufactured and/or

sold in the United States and elsewhere. During the period covered by this Count, Defendant and

its co-conspirators manufactured HCPs (a) in the United States for installation in vehicles

manufactured and sold in the United States, (b) in Japan for export to the United States and

installation in vehicles manufactured and sold in the United States, and (c) in Japan for

installation in vehicles manufactured in Japan for export to and sale in the United States.

13. HCPs are located in the center console of an automobile and control the

temperature of the interior environment of a vehicle. When purchasing HCPs, the automobile

manufacturer issues RFQs to automotive parts suppliers on a model-by-model basis for model

specific parts. Automotive parts suppliers submit quotations, or bids, to the automobile

manufacturer in response to RFQs~ and the automobile manufacturer awards the business to the

5


selected automotive parts supplier for the lifespan of the model, which is usually four to six

years. Typically, the bidding process for a particular model begins approximately three years

prior to the start of production. Japanese automobile manufacturers procure parts for U.S.

manufactured vehicles both in Japan and the United States.

Conspiracy to Restrain Trade

14. From at least as early as January 2000 and continuing until at least February 2010,

the exact dates being unknown to the United States, Defendant and its co-conspirators

participated in a combination and conspiracy 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, HCPs sold to an automobile manufacturer in the United States and elsewhere. The

combination and conspiracy engaged in by Defendant and its co-conspirators was in

unreasonable restraint of interstate and foreign trade and commerce in violation of the Sherman

Antitrust Act, 15 U.S.C. § 1.

15. The charged combination and conspiracy consisted of a continuing agreement,

understanding, and concert of action among Defendant and its co-conspirators, the substantial

terms of which were to rig bids for, and to fix, stabilize, and maintain the prices of, HCPs sold to

an automobile manufacturer in the United States and elsewhere.

Manner and Means of the Conspiracy

16. For purposes of forming and carrying out the charged combination and

conspiracy, Defendant and its co-conspirators did those things that they combined and conspired

to do, including, among other things:

6


a. participating in meetings, conversations, and communications in the

United States and Japan to discuss the bids and price quotations to be submitted to an

automobile manufacturer in the United States and elsewhere;

b. agreeing, during those meetings, conversations, and communications, on

bids and price quotations to be submitted to an automobile manufacturer in the United


c. agreeing, during those meetings, conversations, and communications, to

allocate the supply of Heps sold to an automobile manufacturer in the United States and

elsewhere on a model-by-model basis;

d. agreeing, during those meetings, conversations, and communications, to

coordinate price adjustments requested by an automobile manufacturer in the United


e. submitting bids, price quotations, and price adjustments to an automobile

manufacturer in the United States and elsewhere in accordance with the agreements

reached;

f. selling Heps to an automobile manufacturer in the United States and

elsewhere at collusive and noncompetitive prices;

g. accepting payment for Heps sold to an automobile manufacturer in the

United States and elsewhere at collusive and noncompetitive prices;

h. engaging in meetings, conversations, and communications in the United

States and elsewhere for the purpose of monitoring and enforcing adherence to the

agreed-upon bid-rigging and price-fixing scheme; and

7


1. employing measures to keep their conduct secret, including but not limited

to using code names and meeting at private residences or remote locations.

Trade and Commerce

17. During the period covered by this Count, Defendant and its co-conspirators sold

to an automobile manufacturer located in various states in the United States substantial quantities

of HCPs shipped from outside the United States and from other states in a continuous and

uninterrupted flow of interstate and foreign trade and commerce. In addition, substantial

quantities of equipment and supplies necessary to the production and distribution of HCPs sold

by Defendant and its co-conspirators, as well as payments for HCPs sold by Defendant and its

co-conspirators, traveled in interstate and foreign trade and commerce. The business activities of

Defendant and its co-conspirators in connection with the production and sale of HCPs that were

the subject of the charged conspiracy were within the flow of, and substantially affected,

interstate and foreign trade and commerce.

Jurisdiction and Venue

18. The combination and conspiracy charged in this Count was carried out, at least in

part, in the Eastern District of Michigan within the five years preceding the filing of this

Information.

8


ALL IN VIOLATION OF TITLE 15, UNITED STATES CODE, SECTION 1.

Dated: January 30, 2012

s/Sharis A. Pozen Sharis A. Pozen Acting Assistant Attorney General Antitrust Division United States Department of Justice

s/Scott D. Hammond Scott D. Hammond Deputy Assistant Attorney General Antitrust Division United States Department of Justice

s/John F. Terzaken, III John F. Terzaken, III Director of Criminal Enforcement Antitrust Division United States Department of Justice

s/Lisa M. Phelan Lisa M. Phelan Chief, National Criminal Enforcement Section Antitrust Division United States Department of Justice

s/Kathryn Hellings Kathryn Hellings Shane Cralle Matthew Lunder Eric Meiring Trial Attorneys National Criminal Enforcement Section Antitrust Division United States Department of Justice 450 5th St. NW, Suite 11300 Washington, DC 20530-0001 Tel: (202) 307-0934

9


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