A Toyota supplier from Japan was just given the biggest fine in Australian history for cartel behavior

Getty Images/Junko Kimura

One of the world’s largest worldwide automotive suppliers, Japanese-based Yazaki Corporation, has received the largest fine ever under competition law in Australia for engaging in cartel conduct.

The $46 million penalty, imposed today by the Federal Court, following an appeal by the Australian Consumer and Competition Commission (ACCC), more than quadruples the original $9.5 million fine and ends a six year case against the global company, which supplied wire harnesses – electrical cabling – used in the Toyota Camry when it was manufactured in Australia.

The penalty aligns the ACCC’s original submission for a fine between $42 million and $55 million.

The Australian decision follows a $US470 million fine for price-fixing in 2012 following a two-year investigation by the US Justice Department that also saw four Yazaki executives in America receive prison sentences. The company, which has an annual turnover in excess of $US14 billion, received additional state-based penalties in the USA over the illegal behavior.

The ACCC began legal action against Yazaki and Australian Arrow in December 2012 over cartel behaviour between 2003 and 2008 when supplying parts to Toyota for the Camry.

The verdict was handed down in November 2015, with the original decision on a $9.5 million fine delivered in May 2017.

The ACCC lodged an appeal within a week, while Yazaki cross appealed against the judgment that it engaged in cartel conduct. The court also dismissed Yazaki’s appeal today.

ACCC chairman Rod Sims said the competition watchdog appealed the original penalty because it was inadequate for deterring businesses from engaging in cartel conduct in the future.

“The ACCC is continuing to seek penalties which are high enough to deter anti-competitive conduct, particularly by large national and multinational corporations,” he said.

The $46 million fine is the highest penalty ever imposed under the Competition and Consumer Act.

A recent OECD report found that average and maximum penalties imposed by Australian courts for breaches of the cartel laws are significantly lower than in other OECD countries.

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