Firm to Pay $29 Million in Antitrust Case

Attacking what it calls a conspiracy to raise the price of a steelmaking component faster than inflation, the Justice Department won agreement from a Japanese company’s U.S. subsidiary to plead guilty and pay $29 million, the fourth-largest criminal fine in antitrust history.

Ridgeville, S.C.-based Showa Denko Carbon Inc. agreed Monday to plead guilty to a scheme to raise and fix prices for graphite electrodes used as a heat source in steel mini-mills. Mini-mills are a growing segment of the industry and now account for one-third of this country’s steel production.

“This case is the first step by the Department of Justice in prosecuting and dismantling an international cartel that increased prices of a vital product used in American steelmaking,” Atty. Gen. Janet Reno said.

A one-count criminal information filed in U.S. District Court in Philadelphia charged the company with violating the Sherman Antitrust Act from 1993 until January 1997. Showa Denko Carbon and its affiliated companies agreed to cooperate in the investigation of what the Justice Department calls a wide-ranging international conspiracy to fix prices and divide up the world market for the electrodes among competitors.

Another graphite electrode producer, Carbide/Graphite Group of Pittsburgh, already has been given amnesty in the case by qualifying for the antitrust division’s corporate leniency program.

Showa Denko Carbon, a subsidiary of the Japanese firm Showa Financing, was also immensely helpful in the Justice Department probe, so prosecutors agreed upon a fine of $29 million for actions that could have carried a penalty of $75 million under federal sentencing guidelines, said one Justice official who requested anonymity.