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Archived — Panasonic Corporation pleads guilty to price-fixing conspiracy

OTTAWA, November 3, 2010 — The Competition Bureau announced today that Panasonic Corporation was fined $1.5 million by the Federal Court after pleading guilty to a criminal charge that it fixed the price of hermetic refrigeration compressors sold to a refrigerator and freezer manufacturer in Canada.

The Bureau's investigation revealed that Panasonic conspired with Embraco North America Inc. and other competitors to fix the price of hermetic refrigeration compressors sold in Canada, and elsewhere, from January 2005 to December 2005. The compressors were sold to W.C. Wood Corporation, located in Guelph, Ontario, and used in the manufacture of various brand-name chest freezers.

"Cracking down on cartels is a top enforcement priority for the Bureau. Panasonic's cooperation allowed the Bureau to pursue this matter in a timely way," said Melanie Aitken, Commissioner of Competition. "Cartels impose higher prices for goods and services and deprive consumers and businesses of the benefits of competition."

Panasonic sold hermetic refrigeration compressors to W.C. Wood Corporation from its manufacturing base in Japan. Prior to negotiating their annual supply contract, Panasonic and Embraco exchanged information on their hermetic refrigeration compressor prices, production capacities and other market intelligence, and agreed to increase the price for hermetic refrigeration compressors sold to W.C. Wood Corporation in Canada.

Panasonic's penalty brings the total fines in this case to $3 million. Embraco recently pleaded guilty and was fined for its role in the conspiracy. Panasonic's plea marks the end of the Bureau's investigation into this matter.

Under the Competition Act, an agreement between competitors to fix prices, allocate markets or restrict output in Canada is a criminal offence. Following amendments to the Act that came into force in March 2010, penalties for violations of the conspiracy provisions include fines of up to $25 million and prison terms of up to 14 years. At the time of Panasonic's offence, which occurred under the previous conspiracy provision, penalties were capped at fines of up to $10 million and prison terms of up to five years.

The Bureau's investigation benefited from cooperation under the Bureau's Immunity and Leniency Programs, which create incentives for parties to address their criminal liability by cooperating with the Bureau in its ongoing investigation and prosecution of other alleged cartel participants.

The Competition Bureau ensures that Canadians prosper from the benefits of a competitive marketplace, driving innovative products and services at competitive prices.

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