General Superintendence investigates cartel of motor valves, valves guides and valves seats

The General Superintendence of the Administrative Council for Economic Defense – CADE initiated, on 27 June 2017, an Administrative Proceeding to investigate a cartel in Brazil and Argentina, with effects in the independent national market of replacement auto parts in the sector of motor  valves, valves guides and valves seats  (Administrative Proceeding 08700.002904/2017-41).

The companies being investigated are: Basso S/A, Mahle Metal Leve S/A, TRW Automotive Ltda., and Valbras Industria e Comercio Ltda.

According to a technical note of CADE’s General Superintendence, there is evidence that these companies would have fixed prices and commercial conditions, divided the market between competitors and shared with each other commercially sensitive information, increasing prices and combining percentage and dates for readjustments of the prices.

According to the General Superintendence, at least 17 individuals linked to the companies, were involved in the cartel by  carrying out this anticompetitive practice through e-mails, telephone calls and face-to-face meetings, between at least 2007 and 2012.

After the initiation of the Administrative Proceeding, the defendants will be notified in order to present their defenses. Once the investigation phase is concluded, the General Superintendence will issue an opinion and forward the case to CADE’s Tribunal, which is responsible for the final decision.

Other investigations in the sector

Between 2014 and 2017, the General Superintendence initiated twelve other Administrative Proceedings to investigate cartels related to the auto parts market.

The investigated cartels were in the following markets: spark plugs (Administrative Proceeding 08700.005789/2014-13); anti-friction bearings (Administrative Proceeding 08012.005324/2012-59); clutch facings (Administrative Proceeding 08700.010321/2012-89); thermal systems – that includes radiators, capacitors and heating systems, ventilation and air conditioning (Administrative Proceeding 08700.010323/2012-78); windshield wipers (Administrative Proceeding 08700.010320/2012-34); safety devices for automobiles – such as safety bells, airbags and steering wheels (Administrative Proceeding 08700.004631/2015-15); dampers (Administrative Proceeding 08700.004629/2015-38); ceramic substrates for automobiles (Administrative Proceeding 08700.009167/2015-45); and automotive spare parts (Administrative Proceeding 08700.006386/2016-53); exhaust systems and their components (Administrative Proceeding  08700.001486/2017-74).

In August 2017, four other markets were investigated by means of dawn raids conducted by the General Superintendence, and could still result in the initiation of new Administrative Proceedings. The relevant markets of these cases were: automotive lighting (headlights, lanterns and brake lights); emergency switches (hazard lights and turning signal); access mechanism (cylinders kits, handles, locks and steering locks); and automotive clutches markets. In addition, there are other ongoing investigations in the auto parts sector.