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Company fined $3m over bearing cartel claims

Roll cage: The Federal Court heard that NSK Australia shared its pricing plans with competitors.

NSK Australia hit with $3 million penalty for colluding on bearing prices

General News logo14 May 2014

By BARRY PARK

A COMPANY that colluded to push up the price of bearings in Australia has been hit with a $3 million Federal Court fine in the second of a series of court cases being brought against alleged cartel members.

The Australian Competition and Consumer Commission said this week that the Federal Court heard that on May 14, 2008, NSK Australia “made and gave effect to an arrangement or understanding with Nachi Australia and Koyo Australia in which it shared its pricing plans at a Southern Cross Association meeting for the purpose of maintaining or controlling the price of bearings to their aftermarket customers”.

The court heard that NSK Australia then bumped up prices by four per cent, although the court noted that it was not known whether the bearing distributor “would have maintained its planned 2008 price increase in any event”.

The court also heard that in February 2009, NSK Australia shared its pricing plans for aftermarket customers with Nachi Australia and Koyo Australia. In the same month, NSK Australia implemented an already announced 10 per cent price increase.

Koyo Australia was slapped with a $2 million fine in October last year after it admitted to plumping bearing prices for Australian customers.

The court also restrained NSK Australia from engaging in similar cartel conduct for three years, and will require it to implement a competition and consumer law compliance training program.

NSK Australia also received a significant discount to its fine for co-operating with the ACCC during the investigation.

Bearings are an essential component in products such as motor vehicles, mining conveyors, household electrical items and farm machinery, and the case against the Australian bearing distributors stems from an investigation into claims about cartel-like behaviour between US car-parts suppliers that have resulted in tens of millions of dollars in fines.

Documents filed with the court have previously said the bearings aftermarket in Australia was worth up to $400 million between 2007 and 2011.

“Cartels cheat consumers 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 conduct involved in this case did not directly affect bearings used in the manufacture of vehicles, the conduct did affect the price of bearings used for aftermarket applications such as repairs to vehicles.”

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