Japanese Capacitor Makers

1257th Commissioners’ meeting (2015)

Case:

Japanese capacitor makers violated the Fair Trade Law by engaging in a concerted action

Keyword(s):

Capacitor, leniency policy

Reference:

Fair Trade Commission Decision of December 9, 2015 (the 1257th Commissioners’ Meeting), Dispositions Kung Ch’u Tzu No.104133, No.104134, No.104135, No.104136, No.104137, No.104138, No.104139 and No.104140

Industry:

Manufacture of Electronic Passive Devices (2620)

Relevant Law(s):

Article 14 of the Fair Trade Law in effect at the time of the conduct

Summary:

1. Since the 1980s, Japanese capacitor makers have convened several multilateral and bilateral meetings to exchange sensitive trading information and discuss product prices. As their products are also sold to Taiwanese businesses, the conduct was in violation of Article 14 of the Fair Trade Law in effect at that time. The participating businesses acted according to the “Regulations on Immunity and Reduction of Fines in Illegal Concerted Action Cases” and applied to the FTC for immunity or reduction of fines. The FTC approved their applications with conditions attached and initiated an ex officio investigation at the same time.

2. Findings of the FTC after investigation:

   In terms of basic materials, capacitors can be divided into electrolytic capacitors (aluminum capacitors and tantalum capacitors), plastic film capacitors and ceramic capacitors. The aforesaid capacitors have different functions and applications, and their markets vary. The focus of the investigation was on the illegal concerted action in the electrolytic capacitor market. Since the beginning of the investigation, the FTC also cooperated with the competition authorities, such as the US, the EU and Singapore, and synchronous investigations on the offenders were launched. After the FTC launched its investigation, some of the businesses involved in the concerted action filed applications for immunity or reduction of fines and provided evidences of the illegal conduct, including meeting notices and minutes, post-meeting records, emails, meeting sign-in sheets, duty rosters, notes, expense receipts for write-offs, business cards, and so on. It revealed that both aluminum and tantalum capacitor makers had held joint meetings between the 1980s and 2014 but aluminum capacitor businesses also convened their own meetings (such as CUP meetings or Hong Kong SM meetings) and bilateral meetings. Tantalum capacitor businesses held bilateral meetings too but aluminum capacitor businesses were excluded from those meetings.

3. Ground for disposition:

   (1)	The aluminum capacitor makers involve in this case were Nippon Chemi-Con Corporation (hereinafter referred to as NCC), Hong Kong Chemi-Con Limited (hereinafter referred to as NCC HK), Nippon Chemi-con Taiwan (hereinafter referred to as NCC Taiwan), Rubycon Corporation (hereinafter referred to as Rubycon), ELNA Co., Ltd, (hereinafter referred to ELNA), Sanyo Electric (Hong Kong) Ltd. (hereinafter referred to as Sanyo HK) and Nichicon (Hong Kong) LTD. (hereinafter referred to as Nichicon HK). These businesses were involved in the concerted action in various degrees and began to participate in meetings at different period of times. From 2005 to January 2014, they held MK meetings and CUP meetings in Japan and SM meetings in Hong Kong. During the same period, they also made contacts via email, telephone, get-togethers or bilateral consultations to exchange sensitive information about prices, quantities, productivity, and responses to customers to establish their mutual understandings on restraining market competition. Meanwhile, the three tantalum capacitor makers, including NEC TOKIN Corporation (hereinafter referred to as NEC TOKIN), Vishay Polytech Co., Ltd. (hereinafter referred to as Vishay Polytech) and Matsuo Electric Co., Ltd. (hereinafter referred to as Matsuo), also exchanged sensitive information regarding prices, quantities, productivity and responses to customers when they attended MK meetings held jointly with aluminum capacitor makers and achieved their mutual understandings on restraining market competition. In addition, they also exchange sensitive information and discussed prices via email, telephone bilateral meetings.
   (2)	Taiwanese electronics businesses mostly relied on imports from the abovementioned capacitor makers. There were a few aluminum capacitor manufacturers in the country but their business scales were far smaller than the Japanese ones. There were no tantalum capacitor local makers and all tantalum capacitors had to be imported. Estimates showed that the sales aluminum capacitors made during the violation period totaled NT$50 billion in value while the tantalum capacitors amounted to NT$16 billion. NCC, Rubycon and Nichicon were the top three aluminum capacitor makers in the world and the tantalum capacitor makers also claimed significant parts of the global market share. Obviously, the conduct of the offenders had created direct and substantial impacts on the domestic markets.
   (3)	The offenders participated in meetings to exchange sensitive information about prices, productivity, quantities and responses to customers to establish their mutual understandings on restraining market competition. The conduct was able to affect the supply-demand function in the domestic aluminum and tantalum capacitor markets and was in violation of Article 14(1) of the Fair Trade Law. The violation period lasted for nearly ten years. The unlawful gains were huge and some of the offenders made gigantic profits. It was a serious violation. Therefore, citing of Article 41(2) of the Fair Trade Law in effect at the time of the conduct, the FTC imposed an administrative fine of NT$1.8683 billion on NCC, NT$82.90 million on NCC HK, NT$293.8 million on NCC TW, NT$1.248 billion on Rubycon, NT$76.6 million on ELNA, NT$842 million on Sanyo HK, NT$111.3 million on Nichicon HK (the fines imposed on the aluminum capacitor businesses totaled NT$4.5229 billion), NT$1.2182 billion on NEC TOKIN, NT$31.2 million on Vishay Polytech and NT$24.3 million on Matsuo (the fines imposed on the tantalum businesses totaled NT$1.2737 billion). The fines totaled NT$5.7966 billion.