Bearings manufacturer NSK Australia has been fined AUD$3 million for price fixing.
The Federal Court imposed the fine after the Australian Competition and Consumer Commission (ACCC) investigated the case.
NSK Australia holds around 10-13% of the $400 million Australia bearings market. Bearings are an essential component in mechanical items, including motor vehicles, mining conveyors, household electrical items and farm machinery.
According to the ACCC, bearings prices were hiked by four per cent in May 2008 and by 10 per cent in February 2009. The price fixing activity primarily affected aftermarket bearings customers – those who purchased bearings for maintenance and repair of motor vehicles, household and industrial machinery.
How it happened
Three senior Japanese executives from NSK Australia, Nachi Australia and Koyo Australia participated in the cartel conduct. They held regular group meetings in Sydney and Melbourne to discuss pricing plans during the nineties. This led to the formation of the Southern Cross Association cartel in 2000. The cartel remained undiscovered for over a decade.
“Cartels cheat customers and other businesses. The ACCC will continue to tackle cartel conduct with the full force of the law,” ACCC Chairman Rod Sims said.
Although the fine imposed on NSK Australia is significant, it reflects a discount that was granted after it cooperated with the ACCC’s investigation. Koyo Australia also faced a $2 million penalty in October last year. Nachi is yet to receive any penalties apart from significant reputational damage.
The Court also ordered NSK Australia to implement a competition and consumer law compliance training program throughout its organisation.
Source: ACCC, $3 million penalty for bearings cartel conduct