Car parts distributors will be the first major company to be sued by a multinational corporation in Australia over the $1 billion price-fixing scandal at their operations.
Key points:The $1.6 billion settlement with Australian automotive giant, ATS, comes after a year of legal actionThe settlement comes after four major Australian car parts companies were forced to close their businessesThe company, Australian Power, had a total turnover of $3.5 billion in 2016The $2.3 billion settlement covers over 6,000 ATS products and services in AustraliaThe deal was agreed in February and the companies have agreed to pay $3 billion to settle the case, which has been in court since August.”ATS and its employees have engaged in unconscionable conduct by engaging in unconsolable conduct and conspiring with other parties to fix the prices of car parts and other goods in Australia,” ATS said in a statement.
“In exchange, the ATS and other parties had a share of the profits from the ATCs fixed prices.”
The Australian government and major car parts firms had been forced to shut down their operations after the AASC found that the company’s products were overpriced and the prices they charged were illegal.
In a statement, Ats chairman David Mott said the companies had made “significant progress” in the case and “will continue to do so”.
“We have a strong relationship with the Ats management team and we look forward to continuing to work with them,” he said.
“As this matter is before the courts, no further comment will be made at this time.”
The company will continue to operate in Australia and the rest of the world under the same management structure and the parties will continue working together, he said in the statement.
The agreement comes after three major Australian automotive companies, including ATS itself, agreed to settle a $1,300 million antitrust case against the Australian company, including a $3bn payment.
In the settlement, the three major car manufacturers agreed to work together to prevent further price-rigging.
In October, the Australian Competition and Consumer Commission said the price-fixes had made ATS “unprofitable and uncompetitive” and forced it to close its businesses.
“The ATS case demonstrates the serious harm to competition and consumer confidence that the AATS actions have caused,” a spokeswoman for the ACCC said.”[It] highlights the need for consumers to take action to ensure their suppliers are not operating illegally.”