EU hits screen makers with record cartel fine
Televisions
(BRUSSELS) - The European Commission on Wednesday hit seven top TV and computer screen makers, including LG Electronics and Philips, with a record fine of 1.5 billion euros for running decade-long price-fixing cartels.
"It's the biggest fine for a cartel decision," EU Competition Commissioner Joaquin Almunia said.
The previous largest such penalty was a 1.38-billion-euro 2008 fine for an auto glass cartel, a Commission spokesman said.
The Commission said there were two cartels operating worldwide -- one for television and another for computer screens, based on conventional Cathode Ray Tube technology of the time.
The companies involved included household names such as LG Electronics and Samsung of South Korea, and Chunghwa of Taiwan alongside Philips of the Netherlands in both cartels, while Japan's Panasonic and Toshiba, and Technicolor, formerly Thomson, were involved in TV screens.
Taiwan giant Chunghwa however was granted complete immunity and not fined as it disclosed the cartel to regulators. Other companies got lesser fines for cooperating in the investigation, the Commission said.
The companies colluded in the supply and pricing of CRTs which accounted for between 50 and 70 percent of the price of the screens.
"The European Commission has fined seven international groups of companies a total of (1.47 billion euros) ... for participating in either one or both of two distinct cartels in the sector of cathode ray tubes," a statement said.
"For almost 10 years, between 1996 and 2006, these companies fixed prices, shared markets, allocated customers between themselves and restricted their output," it said.
The two cartels were among the most organised that the Commission had investigated, it said, carrying out the "most harmful anti-competitive practices including price fixing, market sharing, customer allocation, capacity and output coordination and exchanges of commercial sensitive information."
The investigation also showed that the companies were well aware they were breaking the law.
"In a document found during the Commission's inspections, a warning goes as follows: 'Everybody is requested to keep it as secret as it would be serious damage if it is open to customers or European Commission'," the statement said.
The Commission noted too how top management level meetings were dubbed "green(s) meetings" because they were often followed by a golf game.
Almunia said the case was "textbook," illustrating all the worst features of anti-competitive practices.
"These cartels for cathode ray tubes are 'textbook cartels': they feature all the worst kinds of anti-competitive behaviour that are strictly forbidden to companies doing business in Europe."