Toyota Australia’s car part supplier fined $46 million for cartel conduct

A Japanese car parts supplier has been ordered to pay a record $46 million for cartel conduct. Yazaki Corporation has been found to have colluded with a competitor to coordinate quotes to supply wire harnesses for Toyota Camrys in Australia.

On Tuesday, the Full Federal Court has imposed the penalty following an appeal by the Australian Consumer and Competition Commission (ACCC), which said the $9.5 million fine imposed on Yazaki last year was insufficient. ACCC originally asked for a fine between $42 million and $55 million.

The court heard that Yazaki engaged in cartel conduct by coordinating with a competitor in drawing up quotes to supply Toyota Australia wire harnesses for its Camrys. Wire harnesses are electrical systems that facilitate the distribution of power and send electrical signals to components of a vehicle. Yazaki’s cross-appeal was subsequently dismissed.

The record-high penalty of $46 million was handed down under the 2010 Competition and Consumer Act. ACCC first launched proceedings against Yazaki and Australian Arrow in December 2012. The Federal Court found that the Japanese company made and gave effect to arrangements with a competitor in 2003 and again in 2008. The court originally ordered Yazaki to pay $9.5 million of penalties in May, but the ACCC lodged an appeal a few weeks later.

“The ACCC welcomes the $46 million in penalties ordered against Yazaki, which is the highest penalty amount ever imposed under the Competition and Consumer Act 2010. We appealed the penalties imposed by the trial judge because we considered that the original penalties of $9.5 million were insufficient to adequately deter Yazaki or other businesses from engaging in cartel conduct in the future,” ACCC Chairman Rod Sims said.

As Sims explained, cartel conduct is illegal because it cheats consumers and other businesses. It also restricts healthy economic growth.