The Full Federal Court has today ordered Japanese company Yazaki Corporation (Yazaki) to pay increased penalties of $46 million for cartel conduct, following an appeal by the ACCC. This is the highest penalty ever handed down under the Competition and Consumer Act (2010).
The trial judge had earlier found that Yazaki had engaged in anti-competitive cartel conduct in the supply of wire harnesses used in the manufacture of the Toyota Camry. The Full Court dismissed Yazaki’s cross-appeal of the trial judge’s finding that it had engaged in cartel conduct.
“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.
During the initial penalty hearing, the ACCC submitted to the court that a total penalty of between $42 million and $55 million would be of appropriate deterrent value, taking into account the serious nature of Yazaki’s actions and the size of their global operations.
“Cartel conduct is illegal because it not only cheats consumers and other businesses, it also restricts healthy economic growth. For this reason, it is of considerable importance that penalties imposed by the Courts are large enough to act as a sufficient deterrent to prevent companies and their employees contravening Australia’s competition laws. The ACCC is continuing to seek penalties which are high enough to deter anti-competitive conduct, particularly by large national and multinational corporations,” Mr Sims said.
A recent report by the OECD found that average and maximum penalties imposed by the Courts for breaches of the cartel laws in Australia are significantly lower than in other OECD jurisdictions.
Wire harnesses are electrical systems that facilitate the distribution of power and send electrical signals to various components of a motor vehicle.
In December 2012, the ACCC launched proceedings against Yazaki and Australian Arrow.
On 24 November 2015, the Federal Court found that, in 2003 and 2008, Yazaki made and gave effect to arrangements with a competitor, which included the coordination of quotes to Toyota for the supply of wire harnesses used in the manufacture of the Toyota Camry.
On 9 May 2017, Justice Besanko ordered Yazaki to pay penalties totalling $9.5 million.
On 30 May 2017, the ACCC lodged an appeal in relation to the penalties imposed. Yazaki cross appealed against the finding it had engaged in cartel conduct.