The Aftermarket Automotive Lighting Conspiracy: Price Fixing in the US and Canada

Price fixing is the verbal or written agreement between two or more companies to charge a set price or similar products. Price fixing is illegal in the United States, Australia and the European Union. It is regulated here in the United States by the Federal Trade Commission and the U.S. Justice Department. The U.S. Justice Department is aware of an Aftermarket Automotive Lighting Conspiracy from 2000-2008, while Canadian Authorities are aware of a conspiracy from 2004-2009.

Polo Shu-Sheng Hsu recently pled guilty and agreed to serve 6 months in jail in addition to a $25,000 fine in connection with the price fixing conspiracy under a plea agreement. In documents viewable at www.justice.gov, Hsu is listed as a former president and chief executive officer of a U.S. distributor for a Taiwan producer of aftermarket auto lights. He admitted to participating in a global conspiracy to fix the prices of aftermarket auto lights- which includes such products as headlamps and bulbs, parking, tail and interior lights, spot lights, fog lights and other lighting equipment for automobiles.

Hsu and others are believed to have unlawfully conspired to fix prices in violation of the Sherman Act, which carries a maximum penalty of 10 years in jail and a one million dollar fine. Hsu and other unnamed defendants are accused of holding meetings in person and via telephone, in order to regulate pricing, both wholesale and retail, and limiting the supply of aftermarket automotive lighting products available to North America. It is also believed that the Defendants regularly exchanged information amongst themselves to ensure that all were following the agreed upon prices, further perpetuating the conspiracy.

Documents found at www.justice.gov do not disclose the name of the company Hsu represents or the names of other companies involved. After further investigation, it is found that at one point Hsu was listed as the owner and President of the multi-million dollar corporation known as Maxzone Vehicle Lighting Corp. out of California.

Maxzone is no stranger to price fixing accusations. Maxzone, believed to be a subsidiary of Depo Auto Parts, was responsible for distributing products in the United States. MaxzoneCanada, believed also to be a subsidiary of Depo, was responsible for distributing products in Canada. In 2009, a class action lawsuit was filed in Canada, naming Maxzone along with other California and Taiwan based companies, as co-conspirators in a global price fixing scheme. This turns a magnifying glass to the hundreds of millions of dollars illegally earned by deliberately raising prices on aftermarket automotive accessories. Other companies named in the suit were:

TYC Brother Industrial Co. Ltd (Taiwan)
Genera Corporation (California)
Depo Auto Parts Ind. Co. Ltd. (Taiwan)
Eagle Eyes Traffic Ind. Co. Ltd. (Taiwan)
E-Lite Automotive Inc. (California)

Headlights and taillights are often the most sought after piece of aftermarket equipment for a vehicle. Most replacements occur as a result of a collision, while others are replaced purely for cosmetic reasons. The cost of manufacturing these goods are relatively low, with the popular "Eagle Eyes" look being able to be duplicated at home for a fraction of what the replacement lenses cost. The Canadian class action lawsuit is seeking general damages of $100,000,000.00 and punitive and exemplary damages in the amount of $10,000,000.00.

With Hsu at the forefront of this ongoing investigation, it leads one to wonder how on earth the President/Owner of a company with a reported 10 million dollars in annual revenue and only 20-49 employees gets off with a six month sentence and a $25,000 fine? It sounds like this investigation has some bigger fish to fry, and Hsu is holding the wok.