Dinn, Hochman & Potter, LLC

Honda supplier to pay $19.9 million fine for price-fixing

Ohio consumers count on fair competition to ensure that they are getting the best prices for their products and services. Unfortunately, some companies behave unethically, which ultimately hurts consumers. Thankfully, in the long run, these unfair practices are uncovered, and through business litigation the companies are held responsible for their actions.

Over the course of about five years, from 2007 to 2012, Honda supplier Showa corp. fixed the prices of goods it delivered to the carmaker. The company, which is based in Japan and operates a plant in Sunbury, reportedly went to great lengths to fix prices of its power-steering components and shock absorbers. Showa corp. even communicated with competitors to ensure that its higher prices would not be noticed.

It is unclear how these practices were uncovered; nevertheless, the evidence against the company was apparently too substantive to deny. Showa corp. pleaded guilty to price-fixing and will pay a nearly $20 million fine. In addition, some victims of these deceptive practices may file additional lawsuits against the company. It is unclear whether the U.S. subsidiary, American Showa, played any role in the price fixing.

Unfortunately, price-fixing has become somewhat common in the automotive industry. This case marks the twenty-seventh time that an auto-manufacturing supplier has admitted to price-fixing, and it is quite possible that there are several other unreported cases.

During the business formation and business planning processes, it is important for leaders to create procedures that help to prevent deceptive trade practices, which can lead to costly business lawsuits. Thankfully, attorneys are available to help businesses through these processes.

Source: Columbus Dispatch, “Honda supplier Showa admits price-fixing,” Dan Gearino, April 24, 2014

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