Samsung, LG fined $35 million over alleged price fixing

Chinese government levies fines against both companies and four other display makers for reportedly rigging the prices of display panels.

Samsung and LG Display have been fined by the Chinese government over charges that they fixed the prices of LCD panels.

China's National Development and Reform Commission fined Samsung $16.2 million and LG $18.6 million, according to the Yonhap News Agency.

Also included in the fines for price fixing were four Taiwanese firms: Chi Mei Optoelectronics, AU Optronics, Chunghwa Picture Tubes Ltd., and HannStar Display. The total fine levied against all six companies reached $56 million.

The display makers were accused of fixing prices on LCD panels that they sold to Chinese TV makers from 2001 to 2006. From the total amount of fines, $27 million was paid to nine TV makers as a refund, officials told Yonhap News.

"From 2001 to 2006, six companies involved held a total of 53 rounds of 'Crystal Conferences,' claiming that they exchange information on the global LCD panel market," an official with the National Development and Reform Commission said, according to Yonhap News. "Those involved turned out to have negotiated prices or manipulated prices, hampering the legitimate rights and interests of other parties and consumers."

Samsung, LG, and the other display makers now have to extend the unpaid warranty period for the TV makers and have promised to abide by Chinese law.

A Samsung spokesman declined to comment to Yonhap. But an LG spokesman told the news agency that "to prevent a recurrence of such problems, LG Display has been mending policies and executing them, and remains committed to operating with compliance and transparency."

A spokesperson for LG sent CNET the following statement:

The decision released on Jan. 4, 2013 in China by the Chinese National Development and Reform Commission concerns LCD panel price-fixing between 2001 and 2006. We do not expect this decision to impact our relationship with customers or panel sales. LG Display remains committed to operating with full transparency in providing the best quality products and services to its global customers.

CNET also contacted Samsung for comment and will update the story if we receive any information.

All six display makers have already faced hefty fines in other parts of the world over the same or similar price-fixing allegations.

In 2008, LG, Sharp, and Chunghwa Picture Tubes pleaded guilty to the price fixing charges and were forced by the U.S. Department of Justice to pay a fine of $585 million .

In 2010, LG, AU Optronics, Chimei InnoLux, Chunghwa Picture Tubes, and HannStar Display were fined around $856 million by the European Commission, which called them a "price fixing cartel." Samsung was also cited but escaped the fine by providing information about the cartel.

In October 2011, the six companies were fined $176 million in South Korea . In December of that year, Sharp, Samsung, and other LCD makers settled a price-fixing case in the U.S. that cost them almost $400 million.

And just last month, LG, Samsung, and others were fined $1.9 billion by the European Commission over the same charges.

The EC found that the companies had formed two cartels, each designed to fix prices, limit production, or share markets and customers between them. One cartel handled cathode-ray tubes for TVs, while the other took care of computer monitors.

Updated at 4:00 a.m. PT on January 7 with statement from LG.

About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.

 

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