Japanese electronics giant Panasonic Corp and a subsidiary of Michigan-based appliance maker Whirlpool Corp have agreed to plead guilty and pay more than US$140 million in criminal fines for their roles in an international price-fixing scheme, the US Justice Department said on Thursday.
The companies conspired to fix the prices of refrigerant compressors, the government said in a written statement.
Refrigerant compressors are placed in refrigerators and freezers, take in low-pressure refrigerant, compress it and pump out a high-pressure vapor that condenses and subsequently cools the devices.
In papers filed in Detroit federal court, Panasonic and Embraco North America Inc are accused of working to fix prices on the compressors from 2004 to 2007 in the US and abroad.
The Justice Department said Embraco would pay US$91.8 million and Panasonic US$49.1 million in criminal fines as part of plea agreements that are subject to court approval.
Christine Varney, assistant attorney general in charge of the antitrust division said the charges were the first brought by the department in its worldwide probe of the refrigerant compressors market.
“We are committed to investigating and bringing to justice those who engage in this kind of international price fixing,” Varney said.
The Justice Department announced in February last year that it had opened an antitrust investigation of the compressor industry, part of a global probe of possible price fixing and other anticompetitive practices at companies that supply the cooling parts for appliances like refrigerators and air conditioners.
Authorities in Europe and Brazil at the time raided the offices of several compressor producers as they investigated a possible global cartel among companies that make the equipment.
Panasonic released a written statement that said the company has fully cooperated with the investigation since it was launched by the Department of Justice.
“Panasonic entered into the plea agreement after carefully taking into consideration the applicable laws and related regulations, the facts and other factors,” the Osaka-based company said in the statement. “Panasonic takes this matter seriously and will make every effort to maintain the public’s confidence.”
Panasonic said it did not expect the payment to have a “material effect” on its financial outlook for the fiscal year ending March 31 next year.
Whirlpool, meanwhile, downgraded its earnings outlook on Thursday.
The Benton Harbor-based company said it would record the US$91.8 million expense during the third quarter of this year and expected to report earnings of US$7.80 to US$8.30 per diluted share compared with its previous outlook of US$9 to US$9.50.
On an adjusted basis, Whirlpool said its full-year outlook of US$9.56 to US$10.06 per diluted share was unchanged. The company is scheduled to release its third-quarter earnings on Oct. 27.
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