Bearings distributor NSK Australia has been hit with a $3 million fine for price fixing after three Japanese executives operated a cartel for more than 10 years.
Senior Japanese executives from NSK and two other bearings companies, Nachi Australia and Koyo Australia, formed the Southern Cross Association cartel which met at Japanese restaurants in Sydney and Melbourne to discuss confidential pricing plans between 2000 and 2011.
The Federal Court on Tuesday found that after restaurant meetings, NSK Australia hiked prices by four per cent in May, 2008 and by 10 per cent in February, 2009.
The Court ordered NSK Australia to pay penalties of $3 million for its involvement in cartel conduct in relation to the price of bearings in Australia.
It found understandings to fix prices were implemented through a long-standing practice between executives of the three companies.
Rod Sims, the chairman of the Australian Competition and Consumer Commission (ACCC), which initiated the action, said although the case did not affect bearings used in the manufacture of vehicles, the conduct did affect the price of bearings used for repairs to vehicles.
“Cartels cheat consumers and other businesses,” he said.
“The ACCC will continue to tackle cartel conduct with the full force of the law.”
Bearings are used in mechanical objects involving movable connections in motor vehicles, mining conveyors, household electrical items and farm machinery.
The court ordered NSK to not engage in similar cartel conduct for three years and to comply with a training program.
The company also received a discount for co-operating with the ACCC during the investigation.
NSK Australia, whose global parent company is headquartered in Tokyo, has a 10 to 13 per cent share of the Australian bearings market which is worth up to $400 million.
In October last year the Federal Court handed down a penalty of $2 million against Koyo Australia for its involvement in the bearings cartel.