Japanese road builders face record price-fixing fine

Japanese road builders face record price-fixing fine

Japan’s antitrust watchdog will impose a fine totaling nearly 60 billion yen on Maeda Road Construction Co and seven other major road paving material companies for forming a cartel to raise the price of asphalt, sources with knowledge of the matter said.

The Japan Fair Trade Commission has started informing the companies, also including Kajima Road Co and Toa Road Corp, of its decision, according to the sources. If finalized, the fine will be the largest combined amount slapped by the watchdog in violation of the country’s antimonopoly law.

Of the total, Maeda Construction is expected to face a fine of nearly 20 billion yen, which is also the biggest for one company.

The companies, all headquartered in Tokyo, are suspected of forming the price-fixing cartel several years ago. Market prices of asphalt are used as a reference when the central and local governments set bidding prices for constructing roads.

An illegal cartel on the price of asphalt could have inflated the cost of public spending on roads, meaning the wasteful use of taxpayers’ money.

The other companies to be penalized are Nippon Road Co, Obayashi Road Corp, Taisei Rotec Corp, Seikitokyukogyo Co and Gaeart Co.

As the material has a market size of hundreds of billions of yen and those major companies have repeatedly fixed prices across Japan, the commission applied a rule under the antitrust law to increase the fine by 50 percent, the sources said.

The watchdog raided Kajima Road in September 2016 on suspicion that it set up a cartel over the asphalt supplied in and around the city of Kobe.

Further investigations were made in February 2017 when the violation was suspected to have extended nationally.

Previously, the largest fine imposed was 27 billion yen in March 2007 for a bid-rigging case over the construction of a garbage incinerator.

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