Capacitor Cartel Probe Heats Up on US Civil, Criminal Sides

—(Policy and Regulatory Report)  The raid of electronic capacitor companies in Japan this week is a further indication that antitrust enforcers may be pursuing a worldwide cartel involving the small, but ubiquitous product, antitrust attorneys said.

“This has the hallmarks of a major international cartel investigation,” said Philip Giordano, an attorney with Kaye Scholer and a 15-year veteran of the Department of Justice’s (DoJ) Antitrust Division.  “The DoJ and its foreign counterparts are conducting parallel investigations.  Many of the manufacturers under investigation are international conglomerates that sell into global markets.”

Giordano said the foreign raids suggest that the cartel activity was recent.  He predicted that the probe may result in indictments against individuals and companies and large fines.  He said, however, any fines might be tempered by the small cost of individual capacitors.  And he questioned whether this probe could expand to include other passive electronic components.

Following a pattern evident in the worldwide probe of price-fixing among Japanese auto parts manufacturers, private attorneys in the US are now seeking clients to represent in civil suits against the manufacturers.

“We’ve been investigating it for several months,” said Joseph Saveri of the Joseph Saveri Law Firm.  “It’s potentially a very large case.”

Saveri is not alone in seeking clients to represent in a capacitor lawsuit.  The American Injury Attorney Group lists myriad capacitor manufacturers and wants their customers to contact the firm.

In the worldwide probe of price-fixing among Japanese auto parts companies, many direct and indirect purchasers have pursued civil suits seeking damages.

Earlier this week, the Japan Fair Trade Commission searched more than eight capacitor manufacturers seeking evidence of price fixing.  As previously reported, Chinese and US regulators also are investigating the allegations.  The probe was triggered when a Japanese company applied for leniency with antitrust agencies worldwide, including the DoJ and China’s National Development and Reform Commission; the two China-based sources told PaRR.

Capacitors are inexpensive parts that store an electronic charge and are found in most electronic products.

A spokesperson for the DoJ has confirmed the existence of a US probe, but declined further comment.

There are several different types of capacitors.  An antitrust attorney familiar with the DoJ probe said the department is seeking information from manufacturers of electrolytic capacitors, aluminum capacitors, tantalum capacitors, and film capacitors.

Saveri said he does not believe that criminal charges are imminent.  He said that while individual capacitors are inexpensive, they are “ubiquitous.”

Two associations representing capacitor manufacturers—the Power Sources Manufacturers Association and the Electronic Components Industry Association—did not respond to requests for comment.

(Reporting by David Baumann)