Last November, a federal grand jury in San Francisco returned a superseding indictment against a Taiwan aftermarket auto lights manufacturer, its U.S.-based subsidiary distributor and its chairman for alleged participation in an international conspiracy to fix the prices of aftermarket auto lights. Aftermarket auto lights are incorporated into an automobile after its original sale, often as repairs following a collision or as accessories and upgrades.

The one-count felony superseding indictment, filed in U.S. District Court in San Francisco, alleges that Eagle Eyes Traffic Industrial Co. Ltd., which is based in Tainan County, Taiwan, participated in a conspiracy to fix the prices of aftermarket auto lights in the United States and elsewhere from about July 2001 to about September 2008. The indictment also charges Eagle Eyes’ highest-ranking officer, Chairman Yu-Chu Lin, aka David Lin, for his alleged participation in the conspiracy from about July 2001 to about September 2008. Lin is a resident of Taiwan. E-Lite Automotive Inc., Eagle Eyes’ U.S. subsidiary based in Chino, California, is also charged in the indictment for its alleged participation in the conspiracy from about March 2006 to about September 2008. November’s indictment supersedes an indictment filed on July 19, 2011, against the second-highest-ranking officer of Eagle Eyes, Vice Chairman Homy Hong-Ming Hsu. Presently, the case is ongoing.

According to the indictment, Eagle Eyes, E-Lite, Lin, Hsu and co-conspirators participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights according to jointly determined formulas. The participants in the alleged conspiracy issued list price announcements to customers in accordance with the jointly determined price structure, and collected and exchanged information on prices for the purpose of monitoring and enforcing adherence to the conspiracy.

The U.S. Justice Department and FBI have been aggressively pursuing price-fixing, with a recent focus on the aftermarket auto lights industry. Including the above mentioned parties, indictments have been brought against four other aftermarket auto lights companies and their executive officers.

The piece of legislation that prohibits price fixing is the Sherman Act, enacted in 1890. The thought of interfering with the free market has long been a fear of economists and the U.S. government. It is argued that tampering with the free market reduces competition and ultimately the consumer bears higher costs as a result. Antitrust law also serves as the reason why large companies must submit requests to the Federal Trade Commission prior to merging.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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