CADE levies fines of over BRL 88 million on cartel of wheel bearings

In a hearing held last Wednesday, the Administrative Council for Economic Defense (CADE) convicted the companies SKF do Brasil, SNR Rolamentos do Brasil, and an individual of cartel activity. The conduct was carried out in the market for automotive wheel bearings supplied to original equipment manufacturers (OEM) and the independent automotive aftermarket (IAM) industry.  Combined, levied fines amount to BRL 88.2 million.

According to the rapporteur of the case, Commissioner Mauricio Oscar Bandeira Maia, the illegal practices involved price fixing, market allocation, and exchange of commercially sensitive information. The violations took place between 2004 and 2011.

With regard to the IAM industry, cartel members would discuss prices charged to independent distributors. Agreements were mainly negotiated by a group comprising members of the wheel bearing aftermarket in meetings held at the head office of the National Union of the Automotive Parts Industry (Sindipeças). Records show the meetings were held at least in the years 2004, 2005, and 2009.

The OEM sector, for its part, supplied Brazilian carmakers. In this segment, carmakers would ask suppliers for price quotes and, based on the order's size, choose one or two companies for the project. After reviewing the quotes, carmakers would contact suppliers to ask for discounts, often being informed of their competitors' quotations.

"Thus, sensitive information was shared at two moments. First, before even giving a quote, to better understand the prices and strategies agreed. Second, to check with other competitors the prices mentioned by customers", Mr Bandeira Maia said.

In this case, participants to the collusion communicated, from 2007 to 2011, through meetings, emails, and phone calls.

For engaging in illegal activities, companies SKF do Brasil and SNR Rolamentos do Brasil were fined BRL 78.7 million and BRL 9.3 million, respectively. Furthermore, SKF's sales director at the time of the violation was imposed a fine of BRL 106,400.

Agreements

Administrative proceedings were launched in 2012, after a leniency agreement signed with companies of the NSK group and related individuals. Considering the agreement was properly executed, the Tribunal granted the signatories immunity from sanctions related to the violation.

CADE also stayed the proceedings against eight companies and eleven individuals who signed Cease and Desist Agreements with the agency. The proceedings are suspended until obligations are fully met. These agreements lead to more than BRL 74 million in financial contributions paid to the Brazilian Government.

Finally, for lack of sufficient evidence, the Tribunal voted to dismiss the charges against other two companies and ten individuals who were under investigation.

Access Administrative Proceedings 08012.005324/2012-59.