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2012年6月25日 (月)

ベアリング業界 不正な「なれ合い」を断ち切れ

The Yomiuri Shimbun (Jun. 25, 2012)
Bearing manufacturers must end illicit collusion
ベアリング業界 不正な「なれ合い」を断ち切れ(6月24日付・読売社説)

A structure of collusion has been exposed in a business sector that is no stranger to such irregularities. Now is the time to eliminate this corruption.

A price-fixing cartel involving industrial machinery bearings used in the manufacture of automobiles and other mechanical items has been brought to light.

The Fair Trade Commission has filed a criminal complaint with the public prosecutor general against three major manufacturers of bearings and seven former executives of these firms on suspicion of violating the Antimonopoly Law. In response, prosecutors have indicted them.

Bearings lessen friction between moving parts of machinery and are built into a wide range of industrial products, including home appliances such as washing machines and refrigerators. It is an enormous business, with the domestic market alone worth 400 billion yen a year.

The four major companies involved in the alleged collusion--including one that reported the illicit practice to the fair trade watchdog on its own and was thereby spared criminal charges--have a total market share of nearly 90 percent.

Since a high level of technological capability is required for the production of bearings, it is hard for new firms to enter the field.

Under the circumstances, it is evident that if the big four companies secretly form a cartel on the price of bearings, the market will be unfairly distorted.


Collusion a hard habit to break

The consequences of a price-fixing cartel are eventually passed on to consumers in the form of higher prices for products.

It is only natural that the FTC has made criminal accusations on the ground that the cartel "can have grave impacts on people's livelihoods."
This is the FTC's first price cartel case in about 3-1/2 years.

The big four manufacturers, with the aim of passing along the rising price of steel, the raw material for bearings, in product prices, allegedly raised bearing prices in a coordinated, behind-the-scenes manner as many as five times from 2004 to 2010.

The four companies are thought to have engaged in such maneuvering as offering different clients slightly different markups in a bid to hide the existence of the cartel, according to the FTC.

Back in 1973, this industrial sector was subject to administrative punishments by the FTC because of a price cartel.

It is very troubling that the bearing industry has failed for so long to shake the habit of unfairly colluding to raise prices. To prevent further recurrences, bearing manufacturers should do their utmost to impress upon the minds of their personnel the need for compliance with laws and regulations.


Leniency policy proves effective

Worthy of note this time is that the system introduced in 2006 for lenience in imposing cartel-related fines led to the revelation of the irregularities.

Under the leniency policy, up to five companies can have their penalties reduced if they step forward on their own to report an illicit business practice. In particular, the first company to report an illicit practice before the FTC starts to clamp down on the case is entitled to full immunity from criminal charges and fines.

Although it was earlier difficult for the FTC to obtain material evidence of such violations as bid-rigging and price-fixing, which by their nature are committed sub rosa, the leniency policy has made it easier to get wind of such illicit dealings.

The number of reporters of illicit business practices has been on the rise recently. The FTC, for its part, should make the best use of such reports for cracking down on irregular business practices so that the consciousness that "crime does not pay" will percolate through the nation's entire business world.

Overseas law enforcement authorities, too, have been strengthening their vigilance and surveillance regarding cartels.

In recent years, an increasing number of Japanese companies have been assessed huge fines in the United States, Europe and elsewhere for price-fixing cartels.

Japanese companies whose operations extend overseas must newly take to heart that such irregularities could destroy their international reputations.

(From The Yomiuri Shimbun, June 24, 2012)
(2012年6月24日01時28分  読売新聞)


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