Price fixing leads to $45M fine for aftermarket lighting supplier

Sep 13, 2011

Many replacement headlights cost about as much as a used car once cost. One reason might be a global price-fixing conspiracy that’s being investigated by the U.S. Justice Department.

The investigation put one on the scoreboard, reported, when Maxzone Vehicle Lighting Corp. agreed to plead guilty to a one-count felony charge and pay a $43 million fine in U.S. District Court in San Francisco on Sept. 13.

The government says Maxzone conspired with others to suppress and eliminate competition by fixing the prices of aftermarket auto lights, which are installed in a car after a collision or as accessories or upgrades. The department said that Maxzone, a wholly-owned subsidiary of the Taiwan-based aftermarket auto lights manufacturer Depo Auto Parts Industrial Co. Ltd., participated in the conspiracy from about April 2000 to about Sept. 3, 2008.

Under the plea agreement, which is subject to court approval, Maxzone agrees to pay the $43 million criminal fine and to assist the department in its ongoing investigation into the aftermarket auto lights industry.

According to the charge, Maxzone and others participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights at certain predetermined levels. According to the court documents, the participants in the conspiracy issued price announcements and price lists in accordance with the agreements reached, and collected and exchanged information on prices and sales of aftermarket auto lights for the purpose of monitoring and enforcing adherence to the agreed-upon prices.

The department said that the conspirators met in Taiwan, the United States and elsewhere for their discussions.

Maxzone is the second U.S. distributor of aftermarket auto lights to be charged in connection with the department’s ongoing investigation. On Aug. 30, 2011, the department announced that Sabry Lee (U.S.A.) Inc. was charged and had agreed to plead guilty.

Maxzone is charged with violating the Sherman Act, which carries a maximum penalty of a $100 million criminal fine.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.