India: CCI Grants 100% Penalty Waiver To NSK Limited And 50% Penalty Waiver To JTEKT Corporation For Market Allocation And Coordinating Bids In Supply Of Electric Power Steering Systems

On August 9, 2019, CCI imposed a penalty on JTEKT Corporation ('JTEKT') and certain employees of JTEKT for contravening provisions of Section 3 of the Act by determining prices, allocating markets and bid-rigging in supply of Electric Power Steering systems ('EPS systems') to three automotive original equipment manufacturers ('OEMs'). ¹

The investigation began pursuant to a leniency application filed by NSK Limited ('NSK') admitting its participation in a cartel arrangement with JTEKT during the period 2005 till July, 2011 to coordinate prices, allocate markets and rig the bidding process for submission of quotations to three OEMs for supply of EPS systems. Subsequently, a leniency application was also filed by JTEKT disclosing the cartel.

CCI observed that the evidence collected by the Director General in relation to the meetings/contacts held between employees of NSK and JTEKT and the findings of the investigation report were not refuted by the parties. With respect to the employees of NSK and JTEKT involved in the cartel, CCI noted that four individuals of NSK and seven individuals of JTEKT contravened provisions of Section 3 of the Act. On imposition of penalty, CCI granted a 100% reduction in penalty to NSK for disclosing the existence of the cartel and cooperating throughout the investigation. CCI also granted a reduction of 50% in penalty to JTEKT for adding significant value to the evidence in possession of CCI and cooperating throughout the investigation.

Accordingly, CCI penalized JTEKT at 1 times of the relevant profit derived by its Indian subsidiary from sale of EPS for the financial years 2009-10, 2010-11 and 2011-12 amounting to INR 17,07,00,000 (approx. USD 2,400,000). Additionally, CCI penalized individuals officers/office bearers of JTEKT who were found to be in-charge of, and responsible for the conduct of the business of JTEKT.

Footnote

1 Case No. 7(1) of 2014.

Published Date: September 21, 2019

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