TRW Automotive faces antitrust investigations in both the U.S. and European Union, it revealed.
Auto parts giant TRW Automotive Holdings Corp. is warning it could face financial penalties stemming from investigations into anti-competitive practices now underway by regulators in both the European Union and the United States.
The warning comes as EU and US regulators ramp up an investigation into anti-competitive practices that began in 2009, during the depths of the global automotive downturn. Critics have contended that some major suppliers used the shake-out of weaker vendors to not just lock down more business but ensure they could drive up prices for raw materials, parts and more complex component systems.
“Competition and antitrust law investigations often continue for several years and can result in significant penalties being imposed by the European authorities as well as the U.S. Department of Justice, as is evidenced by the significant fines the European Commission has imposed, in some cases, for violations in other sectors, TRW said in a statement this week.
“At this point, the company cannot estimate the financial impact resulting from this investigation. The Company will evaluate developments in this matter on a regular basis and will record an accrual as and when appropriate,” the statement said.
TRW said it is cooperating fully with the competition authorities in their ongoing investigation, noting European antitrust authorities have been taking a close look at its Occupant Safety Systems business unit locations in Germany to gather information in connection with an investigation of anti-competitive conduct in the European Union.
A related subpoena was received in the United States from the U.S. Department of Justice. The supplier revealed that these inquiries are part of an ongoing investigation of automotive parts manufacturers concerning possible violations of competition laws.
The EU initiated the investigation into anti-competitive practices in the automotive supplier business within the European Union in 2009 and has contacted several companies during the course of the probe.
Antitrust law investigations often continue for several years and can result in significant penalties being imposed by the European authorities as well as the U.S. Department of Justice, as is evidenced by the significant fines the European Commission has imposed, in some cases, for violations in other sectors.
With 2010 sales of $14.4 billion, TRW Automotive ranks among the world’s leading automotive suppliers and is a major supplier of safety equipment.