EU hits Philips, LG, Samsung, others with $1.9B antitrust fine

European regulators impose massive penalties on a series of TV and display makers for "cartel" activity affecting now-outmoded CRT products.

A ring of Philips flat-panel TVs. Stephen Shankland/CNET

European antitrust authorities have imposed a series of fines against former producers of cathode-ray tube (CRT) televisions and computer displays for "cartel" activity, amounting to 1.47 billion euros ($1.92 billion) in total.

The companies were charged under EU antitrust and competition law with fixing prices in the CRT television market -- a long-lived technology that was gradually replaced by alternatives such as liquid-crystal display (LCD) and plasma displays -- for a decade ending in 2006.

In a statement today, the European Commission said the companies artificially "fixed prices, shared markets, allocated customers between themselves and restricted their output," for almost 10 years at the expense of the consumer. The Commission noted that the cartels "operated worldwide."

The Commission said there were two cartels, defined by the EU as a group of similar, independent companies that join together to fix prices, to limit production or to share markets or customers between them. One cartel was concerned with color picture cathode-ray tubes for televisions, and the other focused on computer monitors.

While Chunghwa, LG Electronics, Philips and Samsung SDI participated in both cartels, Panasonic, Toshiba, MTPD (a Panasonic subsidiary) and Technicolor (formerly known as Thomson) participated only in the cartel for television cathode-ray tubes.

Chunghwa was given immunity from prosecution and therefore received no fine after the company was the first to reveal the existence of one of the "most organized cartels the Commission has investigated," according to the statement. Other companies received reductions of their fines for cooperating with the investigation under the Commission's leniency program.

The Commission noted that the companies "were well aware they were breaking the law." In one document discovered during the Commission's inspections, a written warning noted: "Everybody is requested to keep it as secret as it would be serious damage if it is open to customers or European Commission." Some documents even noted: "Please dispose the following document after reading it."

EU authorities said that the cartel participants were therefore "taking precautions to avoid being in possession of anticompetitive documents."

Competition Commissioner Joaquin Almunia, who heads the European antitrust authorities, said the "textbook cartels" showed "all the worst kinds of anticompetitive behavior that are strictly forbidden to companies doing business in Europe."

"They accounted for 50 to 70 percent of the price of a screen. This gives an indication of the serious harm this illegal behaviour has caused both to television and computer screen producers in the [European Economic Area], and ultimately the harm it caused to the European consumers over the years," he added.

 

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