Korean Economy News
Korean watchdog hits Japanese auto part makers with $7.6 mn price-fixing fine

Chung Seok-woo and Kim Hyo-jin

South Korea’s antitrust watchdog slapped a combined fine of 9.2 billion won ($7.59 million) on four Japanese auto parts makers on charges of price fixing over the past 10 years.

The Fair Trade Commission (FTC) said Sunday that Mitsubishi Electric, Hitachi Automotive Systems, Denso Corporation and Diamond Electric Mfg. had conspired to fix prices when selling auto parts to local automakers, resulting in inflated costs for Korean customers.

Mitsubishi received the heaviest fine of 8.09 billion won, while Hitachi was fined 415 million won. Both were referred to prosecution for engaging in particularly serious misconduct. Denso and Diamond were fined 429 million won and 268 million won, respectively.

According to the FTC, the Japanese makers divvied up their global clients before entering into bids from 2004 to 2014. Hitachi helped Mitsubishi gain the winning bid to supply alternators for Renault Samsung QM5. Bids were similarly rigged for Hyundai’s Grandeur HG and Kia’s K7 VG, with Mitsubishi submitting a higher price to help Denso clinch the deal.

Denso commands the largest share in the world alternator market with 28.9 percent. Mitsubishi is the third-largest with a share of 14.3 percent.

The FTC announcement comes at a time of escalating tensions between Seoul and Tokyo. Japan last Friday removed Korea from its list of countries that enjoy preferential trade status, a month after it tightened export controls of high-tech materials essential for Korea’s key industries.

The FTC said it had already confirmed the punitive measures against the Japanese makers in late June. It had planned to make the announcement in mid-July but had put off the date in part due to diplomatic reasons regarding the row with Japan.

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