Foreign Fines
The Korea Fair Trade Commission (FTC), the country’s anti-trust regulator, announced on December 23 that it imposed fines worth 114.6 billion won (US$108.0 million) on local units of Japan’s Denso Corp., Germany’s Continental AG and Bosch, and will bring charges against five companies including Denso Corp. itself.
The four auto-parts suppliers, which virtually dominate the market for instrument panels and wipers, raised prices for auto parts by taking turns in price-fixing.
The financial damage is estimated to be around hundreds of thousands of won per vehicle. Instrument panels and wipers account for nearly 0.5% of the total auto price. Supposing that the price of a car is 20 million won, those auto parts are valued at about 100,000 won. The FTC also estimated that the total number of cars (including those scheduled to be produced) affected by price collusion would reach around 11 million units.
In fact, the difference in estimates among auto parts suppliers jumped from 5% to 22% after price fixing, which means excessive profits for them.
Shin Dong-kwon, Head of the Cartel Investigation Bureau at the FTC, said, “We collaborated with antitrust regulators from the US and the EU to crack down on price collusion among auto parts makers. And we will closely monitor international cartels targeting the Korean market in the future.”