SEJONG, Apr. 13 (Korea Bizwire) — South Korea’s antitrust watchdog said Monday it has slapped a combined 7.5 billion-won (US$6.85 million) fine on a German car bearing company and a Japanese auto parts manufacturer for Illegal price rigging.
According to the Fair Trade Commission (FTC), Schaeffler Korea, a wholly owned subsidiary of a German automotive bearing company, and the local office of JTEKT Corp. of Japan colluded with each other from 2001 through 2008 to artificially prop up prices and share corporate information.
Schaeffler Korea has been fined 5.48 billion won, while JTEKT has been ordered to pay 2.02 billion won.
Besides the fines, the two companies were ordered to refrain from taking similar actions in the future, the agency said.
The price rigging involved expensive and large double tapering bearings that the companies sold to Hyundai Motor Co. and its smaller affiliate Kia Motors Corp. They are used in auto transmissions and car pressure shafts.
“Managers from the two companies met in May 2001 and agreed to work together to prevent price cuts,” an FTC official said. “The two agreed to notify each other ahead of any moves to adjust prices and exchanged details on ways to set prices that were reflected in actual bids.”
Schaeffler Korea and JTEKT also concurred on splitting the market 50-50 and regulating production to prevent a drop in prices, he added.
The FTC said the latest move can help reduce the burden on carmakers, which will likely benefit local buyers.
The latest move is significant since the global bearing market is effectively controlled by a handful of specialized companies, the FTC said, adding it will send a clear signal to international cartels.