Second Capacitor Maker Pleads Guilty to Price Fixing

Hitachi Chemical Co. Ltd. is the second capacitor manufacturer to plead guilty to fixing prices for electrolytic capacitors in the U.S. between 2002 and 2010, according to the U.S. Department of Justice. In 2015, NEC Tokin Corp. plead guilty to fixing prices for electrolytic capacitors sold to customers in the U.S. between 2002 and 2013.

“Hitachi Chemical subsidiaries and co-conspirators fixed the prices of capacitors, a fundamental component of widely used electronic products,” said Deputy Assistant Attorney General Brent Snyder, in a press release. “This is the second guilty plea in this investigation, and we will continue to pursue companies and individuals that conspire to undermine competition for technology components of all shapes and sizes.”

Hitachi will also pay a criminal fine, and the plea agreement is subject to court approval. NEC TOKIN was sentenced to pay a fine of $13.8 million. These charges are a result of a federal antitrust investigation being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office into “price fixing, bid rigging and other anti-competitive conduct in the capacitor industry.”

The public affairs office of the DOJ did not respond to questions regarding the ongoing investigation, and in particular, other capacitor manufacturers or product types under investigation. However, NEC TOKIN and Hitachi, along with several other aluminum electrolytic and tantalum electrolytic capacitor manufacturers, received cease and desist notifications from the Japan Fair Trade Commission, stating that they were in violation of antitrust laws and would receive administrative fines.

Aluminum electrolytic capacitor makers cited include Nichicon Corp., Nippon Chemicon Corp., Rubycon Corp., and Hitachi AIC Inc. For tantalum products, suppliers include Matsuo Electric Co., Ltd., Nichicon Corp., NEC TOKIN, and Vishay Polytech Co., Ltd. (Holystone). Note: The Vishay Polytech product portfolio became part of Vishay Intertechnology when the company acquired Holystone Polytech Co., Ltd., Miharu, Japan, in June 2014. These violations occurred in 2010. Similarly, the Taiwan Fair Trade Commission in December 2015 announced violations by seven aluminum electrolytic capacitor manufacturers and three tantalum capacitor makers.

Aluminum electrolytic capacitor manufacturers include Nippon Chemi-Con Corporation (NCC), Hongkong Chemi-Con Limited (NCC HK), Taiwan Chemi-Con Corporation (NCC TW), Rubycon Corporation(RUBYCON), ELNA Co., Ltd.(ELNA), SANYO Electric (Hong Kong) Ltd. (SANYO HK), and Nichicon (Hong Kong) Ltd. (NICHICON HK). The three tantalum capacitor companies cited are NEC TOKIN Corp. (NEC TOKIN), Vishay Polytech Co., Ltd. (VISHAY POLYTEC), and Matsuo Electric Co., Ltd. (MATSUO).

The Taiwan FTC stated in a release that these companies “participated in meetings or bilateral communications to exchange sensitive business information such as prices, quantity, capacity, and terms of trade to reach agreements, the conducts were sufficient to affect the market function of capacitor in Taiwan.”

Administrative fines include the following: NT$1,868,300,000 on NCC, NT$82,900,000 on NCC HK, NT$293,800,000 on NCC TW, NT$1,248,000,000 on RUBYCON, NT$76,600,000 on ELNA, NT$842,000,000 on SANYO HK, NT$111,300,000 on NICHICON HK, NT$1,218,200,000 on NEC TOKIN, NT$31,200,000on VISHAY POLYTEC, and NT$24,300,000 on MATSUO; the amounts of the fines totaled NT$5,796,600,000.

The Taiwan FTC attributes the investigation results to working with international enforcement agencies including in the United States. “The FTC stressed that this case has shown the successful results of its efforts in international enforcement cooperation with other competition authorities through years. The FTC had worked with competition authorities of US, EU and Singapore in investigation activities since the beginning.”

“In addition to coordinate a synchronized investigation action on 28 March, 2014, the FTC also exchanged enforcement experiences with these agencies through telephone conferences or emails. The FTC’s decision is the first among competition agencies and will be a highly concern internationally as it is still under investigation at least in countries such as EU, US, Japan, Korea, Singapore and China, etc.,” added the Taiwan FTC. However, Taiwan FTC also stated the investigation found “

Japanese capacitor companies had convened several multilateral meetings and engaged in bilateral communication since the 1980s, and had exchanged sensitive business information to reach agreements. Products involved in this case included aluminum capacitors and tantalum capacitors.”

The investigation also found that the companies, at least from 2005 to January 2014, met several times in Japan and other countries to exchange sensitive business information, including prices, quantity, capacity, and terms of trade to reach agreements.