Indonesia considers sanctions on auto parts cartel – Global Competition Review

Indonesia’s antitrust authority has launched infringement proceedings against Denso and Sanden for allegedly conspiring to allocate the market for supplying air conditioning systems for certain Daihatsu vehicles.

Indonesia’s Competition Commission held a hearing with the two Japanese companies yesterday, which included laying out findings that they reached an agreement in 2009 to divide the air conditioning supply markets in Indonesia and Malaysia.

The agency said that during its preliminary probe, Denso and Sanden agreed to sign an “integrity pact” to eliminate the anticompetitive conduct. The ICC did not respond to a request for comment as to whether it plans to issue a fine or whether the integrity pact is sufficient.

However, the companies could still face fines and have 30 days to respond to the alleged violation report, at which point the agency will hold another hearing to hear oral submissions. The maximum fine for cartel conduct in Indonesia is 25 billion rupiahs (€1.5 million).

The authority noted that Denso and Sanden were part of an EU settlement agreement in 2017 after they admitted to their role in a global cartel that fixed the price of air conditioning components used in vehicles. Sanden paid €63 million and Denso agreed to a €322,000 fine.

The Indonesian authority said the companies initiated the conspiracy toward the end of 2008 when Daihatsu Motor revealed plans to supply certain low-cost green cars with various spare parts, including air conditioning systems. At that time, the main two air conditioning manufacturers in Indonesia and Malaysia were Denso and Sanden, the agency said.

The watchdog found that the two companies held a meeting in June 2009 to allocate the market for air conditioning systems supplied for Ayla cars in Indonesia – where Denso had major sales territories – and Axia cars in Malaysia, which was dominated by Sanden.

The companies agreed to not aggressively bid against each other, which led Daihatsu to select Denso in Indonesia in a 2011 tender and Sanden in Malaysia in 2013, the authority found.

Denso and Sanden did not respond to requests for comment.

Counsel to Denso

Assegaf Hamzah & Partners

Counsel to Sanden

Hadiputranto Hadinoto & Partners (Baker McKenzie)


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