Japanese automobile part maker Showa Corporation has been fined $13 million by the Ontario Superior Court of Justice in Toronto after the company pleaded guilty to one count of bid rigging related to an illegal deal it had with another car parts supplier.
The fine is the second largest ever issued by a Canadian court for bid rigging, according to a media statement issued Friday by the Competition Bureau, a Canadian law enforcement agency formed to ensure that businesses operating in the nation function in a competitive manner.
According to the bureau’s investigation, Showa had an illegal business arrangement in place with another electric power steering gears supplier between October 2007 and April 2008. Both companies sold gears to Honda Motor Company for cars made in Canada during this time.
Showa has employed its own competition compliance program to help prevent a similar infraction from occurring.
In recent years, the agency has investigated additional bid rigging agreements and illegal business practices related to the sale of motor vehicle components placed in vehicles built in Canada and other locations. These crimes have resulted in nine guilty pleas and more than $70 million in fines for bid rigging since 2013.
“The Bureau first learned of cartel activity in the motor vehicle components industry by way of its Immunity Program, after which it began investigating in December 2009. The investigation also benefitted from the cooperation of numerous companies under the Leniency Program, in which Showa participated,” the bureau’s statement explained.
Stéphane Hould, deputy commissioner of competition for the bureau said bid rigging results in higher prices for consumers and makes companies less competitive and innovative. He said bid rigging is a “toxic behavior that harms the economy and consumers, in Canada and around the world.”
Showa Corporation’s stock is currently valued at $6.