EU slaps record fine on TV tube cartel
Bloomberg and Reuters Brussels
ROYAL Philips Electronics and LG Electronics are among companies that have been fined a record e1.47 billion (R16.8bn) by EU antitrust regulators over price-fixing agreements for now-obsolete cathode ray tubes used in television and computer monitors.
Philips had been fined e313.4 million while LG faced a e295.6m penalty, the European Commission said in a statement yesterday. The companies also shared a fine of e391.9m for a unit they jointly owned.
Panasonic was fined e157.5m and shared an e86.7m punishment with Toshiba and MTPD, a Panasonic unit.
Philips spokesman Joost Akkermans said the fine was “disproportionate and unjustified” and related to a unit it divested in 2001. Philips would appeal the EU decision, he said.
“Cathode ray tubes were a very important component in the making of television and computer screens. They accounted for 50 percent to 70 percent of the price of a screen,” EU Competition Commissioner Joaquin Almunia said.
Sales of cathode ray tubes used in television and computer monitors declined after customers switched to liquid-crystal and plasma display sets.
Philips and Technicolor, previously known as Thomson, received objections in the EU probe in 2009. Antitrust watchdogs in the EU, Japan and South Korea raided companies in 2007 over concerns they had colluded to fix prices.
Samsung SDI, an affiliate of Samsung Electronics, was also told to pay e150.8m. Toshiba was separately fined e28m and Technicolor was fined e38.6m.
Samsung SDI, Philips and Technicolor received reductions to their fines for co-operating with the investigation.
Chunghwa Picture Tubes was not punished because it was the first to inform regulators of the cartel.
Top management meetings between the companies to fix prices were often followed by a game of golf, the EU said in the statement. The firms fixed prices, shared markets, allocated customers between them and restricted their own output in two worldwide cartels between 1996 and 2006.
“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,” Almunia said.
He said the violations were especially harmful for consumers, as cathode ray tubes accounted for between 50 percent and 70 percent of the price of a screen.
Cathode ray tubes have largely been replaced by more advanced display technologies such as liquid-crystal display, plasma display and organic light-emitting diodes.
The biggest fine prior to the cathode ray tubes cartel was e1.38bn imposed on participants in a motor vehicle glass cartel in 2008.
The commission’s sanctions followed a total fine of e128.74m levied last year against four producers of the glass used in cathode ray tubes.
Chunghwa Picture Tubes, Samsung Electronics, LG Display and three other liquid crystal display producers were fined a total e648m two years ago for taking part in a cartel.