The Tokyo High Court on Wednesday found 25 water meter manufacturers and 34 of their employees guilty of rigging bids for Tokyo Metropolitan Government contracts in violation of the Anti-Monopoly Law.
Presiding Judge Toshimaro Kojo ordered the companies to pay fines ranging from 5 million yen to 9 million yen and sentenced the defendants to six to nine months in prison. However, both the fines and prison terms were suspended for two years.
In handing down the ruling, the judge said the defendants must be condemned harshly, as fair and free competition must be ensured for the sake of protecting consumers and standardizing international trading. According to the ruling, the manufacturers and the employees secretly predetermined how many household water meters each of the companies would contract to supply, in accordance with their past records.
The ruling pointed out that water meter prices plunged after previous hearings shed light on rigging of tenders for meters, contending that rigging bids inflicts serious damage on water users. The ruling also said that Kinmon Seisakusho Co. of Tokyo and Aichi Clock-Electric Co. of Nagoya played key roles in rigging the bids.
In past hearings, the defendants effectively confessed to the charges brought against them. After the rigged bids came to light, the Metropolitan Tokyo Government lodged a demand with the defending companies that they repay about 4.1 billion yen in additional income they had earned as a result of the practice.
The Fair Trade Commission on Monday also ordered 24 of the 25 defending companies to pay about 387 million yen in penalties for rigging the bids. Kazunori Kawakita, chief of the Tokyo government's Water Bureau, refused to comment because he had not read the court's ruling, and said the local authorities would take all necessary steps to eliminate such bid rigging.